Buying International Real Estate

[yasserak]

Hi

In 2021, I bought a house overseas. It will be my main home.  It was semi completed.

I know that when I sell it in the future, I will have to report that to the IRA to calculate Capital Gain Tax...etc.

1. Anything I should do in 2021 tax return to mention that I bought a house?
2. I will need to keep track of all the dates, the amount paid, the contract, all the cost of completing and finishing it ... etc. Anything else I should keep track off or be aware off so I can make it easier in the future to report? 

Thank you!

[ColeenD3 · Accepted solution]

No, you do not report anything now. You are correct in that you will need the entire cost of the house for tax purposes when you sell it.

In most situations, the basis of an asset is its cost to you.

The cost is the amount you pay for it in

• cash
• debt obligations and
• other property and services.

Cost includes sales tax and other expenses connected with the purchase.

• Escrow fees on closing
• Improvements at time of purchase
• Abstract fees (abstract of title fees).
• Charges for installing utility services.
• Legal fees (including fees for the title search and preparation of the sales contract and deed).
• Recording fees.
• Surveys.
• Transfer or stamp taxes.
• Owner's title insurance.