Hi, I appreciate your guidance on an upcoming sale of foreign property such that I don’t get double taxed, and I make sure that both governments are satisfied (i.e., USA and Portugal).
Given the above, how should I proceed in terms of:
Thank you!
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Yes, you do need to pay US tax on the property but you can apply for a foreign tax credit to receive credit for the taxes paid in Portugal. The calculation does factor in the taxes that you paid in Portugal versus the US tax rate and you receive a credit for the difference.
First you need to report the sale of your Foreign property. This is accomplished by going to.
Once the sale has been reported, you will request a foreign tax credit.
1. You can use Turbo Tax next year.
2. You want any documentation that relates to your taxes. If you are reporting the income as your share of the sale of the home, you would want those documents.
3. As long as you have a good records for the money, from the sale to your brother to you, you are fine.
4. You can always come back with more questions, best wishes and I am sorry for your loss.
Thank you for your feedback and your message. Kindly allow me the follow-up:
1. Since I am paying 25% capital gains taxes in Portugal, and given there is a tax treaty between Portugal and USA, do I need to pay taxes on this sale in the US?
2. I am assuming the answer to 1) is "no" but I need to declare it. Hence, most likely there is a Form of some sort to fill-out in my 2025 taxes, whereby I declare the total profit and state the capital gains taxes already paid in Portugal, thereby amounting to zero what I pay to the IRS. If so, what is the Form?
3. I am assuming that capital gains on long term property are taxed at 20% in the US (https://www.irs.gov/taxtopics/tc409). If I pay 25% taxes in Portugal, will the extra 5% (i.e., 25% PT - 20% US) somehow be factored into my US taxes? (i.e., lower my US taxes)
Thank you!
Yes, you do need to pay US tax on the property but you can apply for a foreign tax credit to receive credit for the taxes paid in Portugal. The calculation does factor in the taxes that you paid in Portugal versus the US tax rate and you receive a credit for the difference.
First you need to report the sale of your Foreign property. This is accomplished by going to.
Once the sale has been reported, you will request a foreign tax credit.
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