Hello! I am a resident in the US. I sold my apartment in my home country in 2020. Taxes have already been paid in home country. How do I input this info on T Tax?

[ra0010]

Also, I don’t have a foreign bank account. My parents kept the money for me and then they wire transferred it.

[Carl]

What exactly did you sell? You call it an "apartment". So was this rental property that you owned and rented out to others? I ask, because it's important to clarify if the property was owned and used by you to generate income, or if it was your primary residence at one time, or if it just sat empty and you "never" used it for anything - especially to generate income.

I know in other countries some people refer to their primary residence as their "apartment" because they do not own it and are paying rent to live in it. Others refer to a primary residence they own the say way.  So the clarification really matters here.

[ra0010]

It was an apartment as in a small home in a building . I meet the two year criteria. However, when I came to the US my parents rented it out and they kept the money because I owed them some. I only received the money from the sale, not from the rent. 
If it matters, we bought it for USD93k and sold it for $56k

[Carl]

we bought it for USD93k and sold it for $56k

So you sold the property at a loss. Unless you received a 1099-S (and I doubt you did since it's foreign property) you don't need to report the sale at all. Losses on the sale of personal property are not deductible from your taxable income anyway.

I meet the two year criteria.

That's irrelevant, since the property was sold at a loss.

when I came to the US my parents rented it out and they kept the money

So you never reported rental income on a U.S. tax return I take it. Therefore, you have no depreciation to recapture, thus you have nothing to report on a U.S. tax return since the property was sold at a loss.

[ra0010]

Thank you! So if I understand you correctly, when we file our taxes next year we don’t have to report this sample, because it was a loss and there is no 1099 involved, right? 
I am confused because I thought I had to report it even if it was a loss, but maybe that’s for domestic sales?

[Carl]

There are only three occasions I"m aware of, where you are required to report the sale.

1) You receive a 1099-S reporting proceeds from the sale. (You did not)

2) You sell at a gain. (You did not)

3) You have depreciation you are required to recapture. (I assume you do not have depreciation to recapture, because I assume you did not report any rental income on SCH E as a part of any U.S. tax return you may have filed in the past.)

[ra0010]

Hi again there! Thank you so much for your answers. They are really helping me clarify and give me peace of mind. I do have two follow up questions:

1) in looking at the IRD website and form 8949 in particular, it says that I need to report if it was a loss too. But you said that I only report gains. I’m confused, can you please clarify?

2) I received the money into my account. If I don’t report this into the tax return, wouldn’t it be a red flag for the IRS?

[Carl]

can you please clarify?

IRS Publication 523 page 16:

Reporting Gain or Loss on Your Home Sale
Determine whether you need to report the gain from
your home. You need to report the gain if ANY of the following is true.
• You have taxable gain on your home sale (or on the residential portion of your property if you made sepa-
rate calculations for home and business) and don’t qualify to exclude all of the gain.
• You received a Form 1099-S. If so, you must report the sale on Form 8949 even if you have no taxable
gain to report. See Instructions for Form 8949 and Instructions for Schedule D for more details.
• You wish to report your gain as a taxable gain even though some or all of it is eligible for exclusion. You
may wish to do this if, for example, you plan to sell another main home within the next 2 years and are likely
to receive a larger gain from the sale of that property.
If you choose to report, rather than exclude, your taxable gain, you can undo that choice by filing an amen-
ded return within 3 years of the due date of your return for the year of the sale, excluding extensions.
If NONE of the three bullets above is true, you don’t need to report your home sale on your tax return. 

If I don’t report this into the tax return, wouldn’t it be a red flag for the IRS?

No.  If you have a bank account in a foreign country with you name on that account, that gets reported elsewhere on your tax return. It's also possible you would have to file a FBAR with the IRS, which is completely separate from your tax return.  If money is transferred from that foreign account to a U.S. financial institution,

If a U.S. financial institution receives funds in your name from a foreign account, they (not you) are obligated to report the transfer to the IRS if the amount of the transfer exceeds $10,000.  But that doesn't mean you may (or may not) be required to report it too. If you're required to report it, that's really got nothing to do with your tax return. See https://www.bossrevolution.com/en-us/blog/international-money-transfer-laws for the basics. Note that website is not an irs.gov website. So I can't speak for the accuracy of it. I just found it easy to comprehend and understand.