Do I Need to Pay U.S. Taxes on Money Received Abroad if Taxes Haven't Been Paid Yet in the Foreign Country

[Losankfer]

My mother sold a property worth $25,000, and that money was deposited into one of my accounts in a Spanish-speaking country. I transferred the money via crypto, using Binance, and sent it to Robinhood here in the United States, then transferred it to my Bank of America account. We haven't paid taxes on the sale of the property in the Spanish-speaking country yet, but we still have time to do so. My question is: If I pay taxes on that money in the country where it was deposited, do I still need to report to the IRS that the money entered one of my accounts abroad? Additionally, do I have to pay taxes on that money here in the United States?

I want to clarify that my mother is a permanent resident and lives in the United States. The money obtained from the sale of that property is a gift/inheritance for me.

[pk]

@Losankfer , we need a little bit more info on this  transaction  and reporting requirements thereof.

(a) Assuming that you  and your mother are both  US Persons ( Citizen/ GreenCard ),  how did your mother acquire the property ?  ( Bought  / inherited etc. ) and for what amount  ( purchase price / FairMarket Value  at the time of inheritance  etc. )

(b) Which country is the property located in  (  There may be  tax treaty considerations) ?

(c)  Why did you transfer the money to USA in such a contorted way  ?   Was  this because of local govt./ restrictions or what ?

(d)  Does you mother  have other income requiring her to file a US tax return ?   How did she file a return in 2022 ?  Does she live in the USA ?

Please answer my questions and I will come back once I hear from you -- yes ?

[Losankfer]

a) My mother purchased the property 20 years ago, but it took her until 7 years ago to fully pay off the mortgage. At that time, the property was valued at around $17,000-$18,000.

b) It is located in Colombia.

c) Transferring $25,000 in that manner incurred only small fees, less than $10 in fees. I transferred USDC from Binance to Robinhood. If I had sent that money in a traditional way, there would have been significant fees for sending and paperwork.

d) She lives in the United States but has no income. She is 100% my responsibility, and I am taking care of her.

[Opus 17]

In general:

1. If you are a US person for tax purposes (citizen, green card holder, or resident alien) you are required to report ownership or control of any foreign account that is worth more than $10,000US at any time during the year.  This is not taxable, but it is a reporting requirement.

https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-a...

2. If your mother sold property that your mother owned, then your mother owes income tax according to whatever tax laws she is subject to, depending on her status.   She is probably liable for tax in the foreign country.  She will also be liable for US tax if she is a US person for tax purposes (citizen, green card holder, or resident alien).

3. You are not subject to any US tax on the proceeds of the sale, as far as I can tell.  It's not your income. If you are just holding the money temporarily, it's your mother's money.  Even if you keep the money, that is a gift from your mother to you.  The taxable part of the sales proceeds are taxable to her, not you, because she owned the property, not you.  Her giving a gift is not taxable in the US, and you receiving a gift is not taxable in the US.  If she is a US person for tax purposes, she must report any gift of more than $17,000US per person per year, but tax is not owed unless her lifetime total of gifts is more than $13 million.  Whether she owes gift tax for making a gift in her home country is up to the laws of that country.  

4. You are subject to income tax on any income you earn from the money while it is in your possession.  For example, if you converted $25,000US to the equivalent in bitcoin, and then converted it back to cash for $26,000US (because of changes in BTC valuation), that $1000 is taxable income to you.   You also owe income tax on any interest paid by the BOA account.