It depends. First of all, what type of property was this? Was it investment property? Was it rental property you previously reported on a US tax return? Let's assume that this is strictly investment property and report it as investment income.
- Log into Turbo Tax >Income and expenses
- Investment Income
- Stocks, Cryptocurrency, Mutual Funds, Other (1099-B)
- Choose the Other option on what type of investment was sold.
- Say yes to the question Did you sell any of these investments in 2021?
- Choose Other for the type of investment sold and answer the questions.
- Next screen asks who brokered the transaction. Here you can mention a bank or name of a person. This is not a critical question other than the fact Turbo Tax won't allow you to leave this blank.
- Next screen will state Now we’ll walk you through entering your sale details. Here is the first drop-down, you will indicate other. Then finish out the interview by entering cost basis, proceeds etc. For expenses, you may list any sales expenses that occur except for property tax or mortgage.
- Depending on the data you put into your returns, Turbo Tax will determine the right forms you need to file your return, which includes Schedule D, 8949, etc. This answers your questions but let's now address the rest of your questions.
- Yes, you may need to pay long term capital gains on this transaction. Be prepared.
- You will not be able to defer your capital gains by reinvesting your money in the US. You will still need to pay those.
- You are correct in your calculation of your basis. You are also correct in assuming that you cannot add your mortgage and property taxes to your basis.
- When you bring money into the US, it is the US Customs and Border Protection that you must be accountable to initially. Here is a website you may wish to research for further information. You may wish to contact them for more specific information on what to expect when you transfer money into the US. This includes finding out if there is a limitation on how much money you are bringing into the US. We have no specific information for this.
- If you are current on your FBAR and FIN CEN requirements, these are the only two forms that the IRS may require and this will be verified by the US Customs and Border Patrol when your transfer is initiated.
- If the money is all yours, you will not need to file a Gift Tax return or a 3520.
- According to this IRS.gov website, a 1031 exchange is Like-kind exchanges -- when you exchange real property used for business or held as an investment solely for other business or investment property that is the same type or “like-kind”. In the IRS website, it does say that real property in the United States is not like-kind to real property outside the United States thus a 1031 exchange is not permissible in your case.
- You would need a Turbo Tax Premier product to report this transaction.
- Now for the last question, each rental property must be accounted for separately because it can affect passive losses if the property is sold. Please view this at the following link. Keep in mind, if you have this in a trust that has a separate EIN, you will need to file a Trust Account form 1041, which is available in the Turbo Tax Business product. The trust account is it's own separate business entity apart from you.
Edited 01/25/22| 03:54 PM PST
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