Selling property in Mexico purchased in my IRA. I will pay MX tax. How do I deduct that on my taxes while in my SEP-IRA ? Do I pay tax twice on these funds?

[TaxGuyBill]

If you have a self-directed IRA, you REALLY, REALLY need to be consulting with a professional that deals with self-directed IRAs.

[SweetieJean]

I totally agree.
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[SweetieJean]

If you haven’t started making withdrawals on your IRA, you can’t take a deduction for foreign taxes paid, as you aren’t paying tax on any IRA income.  On the upside, the foreign taxes reduce your account’s earned income. Why is that a plus? Once you begin making withdrawals and are subject to US tax, you are taxed only on the net amount.