My boyfriend bought an investment property overseas two years ago. It was owner financed and the deed was help in escrow with an attorney. Before paying off the owner- financed loan, he sold it. The loan was paid off by the new buyer and the deed was transferred to their name.
He sold it for about 20,000 more than he bought it for.
Does he need to report this and if so how?
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Yes, this would be reported as a sale of an investment. It does not matter that the property was overseas, it is still income he received and property he sold. (this is assuming he is a US citizen with US reporting requirements) To do this select the following:
Depending on his other income and his filing status, he will end up paying anywhere from 0% to 20% capital gains tax on the sale.
The capital gains rates are as follows based on income
Also, depending on whether or not the money he received went into a foreign account or came directly into a US account, he may also have foreign financial assets reporting requirements .
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