Hi, I appreciate your guidance on an upcoming sale of foreign property such that I don’t get double taxed, and I make sure that both governments are satisfied (i.e., USA and Portugal).
- My parents purchased the property in 1994 and made my two brothers and I co-owners
- My parents reserved the right of use for themselves. "Right of use" is a Portuguese legal construct whereby they managed all aspects related to the property and used it for their own purposes. Selling/renting/etc would require their prior approval and/or them relinquishing their right of use
- Property is located in Portugal and was used as their company headquarters (i.e., it isn’t a residential property and we never lived in it)
- I was a minor at the time of purchase and have never been involved
- I am a US citizen. I live in the US and don't have a bank account in Portugal
- My father passed away with COVID and his business shuttered. My mother is relinquishing her right of use and the property is being sold
- Sales proceeds will be deposited in my brother’s account and then split three ways amongst us brothers. Current plan is to have my portion wire transferred to a Wise account and subsequently to my US BoA bank
- Portuguese law requires me to pay capital gains in Portugal. Previously these were a flat 28% rate over all capital gains accrued to non-resident foreigners. Now they are taxed in the same manner as Portuguese citizens. My estimated tax rate will be 25%. After tax I expect to receive less than $80K
- Portugal and the US share a tax treaty. Not sure that implies
- We have a potential buyer and expect the sale to go through sometime this year (i.e., 2024)
Given the above, how should I proceed in terms of:
- Using TurboTax next year to file 2024 taxes
- Any documentation required from Portugal (e.g., sale, government, etc) for IRS
- Revising/executing current plan of depositing proceeds (i.e., 100% to brother account -> 33% to my BoA account)
- Anything else you deem important
Thank you!
