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Buying property abroad

I am planning to buy property abroad. I don't have bank account there so I am planning to wire money to my sister and she will pay seller. Since there will be large sum, how this needs to be reported to IRS on my tax return?

 

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Accepted Solutions
pk
Level 15
Level 15

Buying property abroad

@almi26 

 

(a) which country ?

(b) Are you a US person ( citizen/GreenCard/Resident for Ta purposes ) ?

(c)  Generally there is no tax even or reporting requirement when you transfer post tax monies  abroad.   However,  your bank in the US will raise a SAR ( Suspicious Activity Report ) as a matter of course. These usually result in  nothing.  If the amount  is in the millions, and/or to a country on sanction list , you will have to get permission from the US treasury.

 

Is there more I can do for you  ?

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4 Replies
pk
Level 15
Level 15

Buying property abroad

@almi26 

 

(a) which country ?

(b) Are you a US person ( citizen/GreenCard/Resident for Ta purposes ) ?

(c)  Generally there is no tax even or reporting requirement when you transfer post tax monies  abroad.   However,  your bank in the US will raise a SAR ( Suspicious Activity Report ) as a matter of course. These usually result in  nothing.  If the amount  is in the millions, and/or to a country on sanction list , you will have to get permission from the US treasury.

 

Is there more I can do for you  ?

Buying property abroad

a/ Montenegro

b/ Yes I have US citizenship 

c/ The purchase price will be around $385K. 

Since I will be transferring money to my sister account, is this considered a gift  for tax purposes. even though she is going to buy property for me and in my name. I gave her authorization to do that.

Then I need to file form 709 correct? I was told, if i send money oversees to any account other than my own, it is considered a gift, no  exceptions.

My understanding is that I won't owe any taxes until 12 Million limit is reached. 

 

Thanks

pk
Level 15
Level 15

Buying property abroad

@almi26 , a beautiful country, from pixes.

 

I do  not believe this is a gift.    A gift would be  if you gave something   ( of value )  to someone  and  expecting / receiving nothing in return.

In your case you are having your sister  providing a service to you  -- the money is yours  and  after the transaction, the property is yours. She  is gifting her time/ effort and ac ting as your agent.  So I do not believe  you have to file a gift form with the IRS.

For future reference, please keep all records  of expenses in acquiring this prop. -- whether you use it as  income property , second home  or whatever , you will need to establish your basis  at the time of acquisition.

 

Is there more I can do for you?

Buying property abroad

That totally make sense, thank you very much for your advice.

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