How do I report foreign property to the IRS?

[pk]

@JAS1705  glad you are all set

pk

[mach3833]

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.

[DaveF1006]

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 

[mach3833]

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

[DaveF1006]

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 

[pk]

@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 ?

[mach3833]

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

[mach3833]

TT does not show 

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

Am i missing something?

[mach3833]

TT wants me to put in bank information. 

[pk]

@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..

[mach3833]

Thanks for your help. The IRS site is so confusing. I am getting there

[pmartin9]

This is great information. Thanks for sharing. I use this information today!