How do I report foreign property to the IRS?

Can you please clarify what you mean by foreign property?

A house in another country.

You do not have to report your foreign property on your tax return.

Foreign real estate is not a specified foreign financial asset required to be reported on Form 8938.  For example, a personal residence or a rental property does not have to be reported. Ref: IRS Foreign Financial Assets

However, if you are renting the foreign property you must report foreign rental activity on your U.S. tax return just like you would report any owned U.S. property.

To enter your rental:

1. Open or continue your return, if you haven’t already
2. Locate the Search bar in the upper right of your screen. Search for rentals and select the Jump to link at the top of the search results
3. Answer Yes to the question Did you have any income from rentals or royalties?
4. On the next screen, What are you here to report?, select Rentals and Continue
5. Follow the screen prompts to enter your rental information.

This TurboTax link Where do I enter income and expenses from a rental property? has information you may find useful.

So if I have property over 150,000 USD in my name in a foreign country, I don't have to report it anywhere?

No, ...unless you reported it as a home office or rented it out.

Only INCOME is reported on a US INCOME Tax return  so  unless this  is an  INCOME producing property like a rental or for business use nothing about it will be reported on the form 1040. 

@timkug , agreeing with my colleague @Critter-3 ,  just wanted to add that 

(a) you need to keep record of your Acquistion cost

(b) depreciation in case you are renting out and reporting on Schedule-E

( c) cost of any improvements.

You will pay taxes on the gain when you dispose off the property.

Note all reportable figures in US$ at the time of transaction.

Does this help ?

Thanks, but does it need to be reported anywhere else to Uncle Sam? not just 1040?

You don't need to report it to the U.S. at all.  When you sell it, you don't need to report the gains to the U.S. if they were under $100k.

Here is some more info for you:

FBAR (Foreign Bank Account Report)
If you have over $10,000 in foreign financial accounts at any time during the year, you must file an FBAR. While there’s no tax liability involved, there are steep penalties for not filing.
Filing an FBAR means filing FinCEN Form 114 online:
https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html

FATCA (Foreign Account Tax Compliance Act) Form 8938
Expats with a total value of foreign assets (excluding real estate) exceeding $400,000 also have to report them on IRS Form 8938 with your tax return.
https://www.goldinglawyers.com/form-8938-real-estate-irs-basics-of-foreign-real-estate-reporting/
https://www.irs.gov/businesses/corporations/fatca-information-for-individuals

When selling foreign property, only need to tell the IRS if capital gains are over $100k. If they are, fill out Form 3520. If the foreign property was your personal residence, you may be eligible for exclusion of your gain on your US tax return if you meet the 2 years out of 5 test for residing in the home.

@someone191 , I  generally agree with all that @timkug  has said except for the last paragraph -----  you will be taxed on all gain when you dispose off  the inherited real estate.  The $100,000 reporting  on form 3520 is for receiving gifts and/or inheritances/bequeathals equal /or  greater than 100,000.  It has nothing to do  with proceeds of sale of inherited real estate.

Does that make sense ?  Is there more one of us can do for you ?

pk

Correct, you do not have to report a Mexican Land Trust as a trust on Form 3520.  You would only report it on that form if you inherited it or it was gifted to you (and then, only in the year inherited/received). 

Form 8938 is only for financial assets such as bank and brokerage accounts, and certain other financial assets such as some types of life insurance or pension plans.  So you are correct there as well, that form is not required for your foreign real property ownership. 

As others have indicated, you would report any income that is generated from the property (such as if you rent it out or when it is sold) but otherwise, there is no reporting requirement on 3520 or 8938.

@JAS1705 , having read through your post / references and my colleague @SusanY1 's  response ( which I agree with ), I want to be sure that we are talking here about:

(a)  ownership of  immovable property in  Mexico  by non-citizens through the Fideicommiso instrumentality  is outside  the FATCA regs  ( form 8938 )

(b)  And that requirements for form 3520 in recognizing  gifts/inheritance  of Mexican  immovable property  from a US person  ( a signatory of a Fideicommiso ) does not come into effect  ( foreign property/asset from a US person to another US person).

Is there more one of us can do for you ?

I'm good many tanks, yes it was a property I bought last year.  Just had a bit of a panic on potential requirements to report it in my U.S. taxes.

@JAS1705  glad you are all set

pk

There seems to be a lot of confusion over how to report a sale in a  fideicomiso in Mexico.  What form is this reported on if it was only held for personal use? I see too many answers. Thanks

I am certain it has to be reported.

You can report it as an investment sale if held for personal reasons.

1. Go to federal
2. Wages and income
3. Investment Income
4. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’  
5. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
6. Since you did not receive a 1099-B, answer “no” to the 1099-B question
7. Choose type of investment you sold - select everything else
8. What type of investment other
9. How did you receive the investment. Choose the appropriate answer
10. On what did did you receive this investment.  The date of purchase of the flipped home.
11. Some basic information:
    1. Description –  Usually the address of the property sold
    2. Sales Proceeds –  The amount you received for the sale
    3. Date Sold – Date you sold the property
    4. Cost or other basis  (This is where you put the purchase price of the home)

@mach3833 

Thanks. Will this info roll over to form 8949? I keep seeing that I have to file this to avoid double taxation.  Thanks

Yes, a 8949 should be generated as well as a Schedule D.  The information flows from form 8949 to Schedule D.  I have seen instances however where a form 8949 was not in the return but found the information on Schedule D.  if this is the case, the sale is still properly recorded on Schedule D and this is what is really important.

@mach3833 

@mach3833 , agreeing with my colleague @DaveF1006  for his excellent reply, I just want to point out  that  the "fideicommiso" is only an ABC trust  to comply with MX prohibition of foreign direct ownership of real-estate in certain areas.  For purposes of US taxes it has no role to play -- I am assuming here that  you the "lease holder" of the asset is selling the  "leased asset" to another.  Thus there is no 1099-S involved. 

But Mexico collects taxes from the transaction  including  "I v a "  and capital gains tax.  The gains tax would fall under  Foreign tax credit ( passive ) but "iva"  ( UK' VAT  equivalent)  I think is like a transaction tax and would not be eligible for foreign tax credit.

Are you all set on this ?

Yes I think so. I just hope Turbo Tax asks the right questions.  Hopefully info rolls from one sheet to the other. It was a nightmare several years ago when TT could not figure out the adoption tax credit . Thanks

TT does not show 

1. Choose type of investment you sold - select everything else   TT shows other.

Am i missing something?

TT wants me to put in bank information. 

@mach3833 , tell me more where you are with this filing --- is it asking for bank information in MX or in USA ( for your refund ).  Also  ( and I don't remember the whole  situation -- thought you are selling  real-estate . why the asset question --- it should have been just like a house being sol=d in the USA.  Let me what I can do for you  and in the meantime I will go back through the posts to refresh my memory..