Selling real estate abroad and transferring cash to the US

[Rocio0010 5,579]

Hello everybody,

I am posting this question here because I don't know where else to post it in Visajourney. So, here we go...

I got my GC through marriage to a USC this April. Now I have just sold property abroad for 56k. The taxes of the property are paid in my home country, so I don't have to pay taxes in here. I have documentation certifying this (both in the original language, and translated by an official translator here in the United States).

Now, the problem lies in the restrictions that the government of my home country imposes on foreign transactions. Believe it or not, they charge 3% every $2000, so we would lose a lot of money if we do it that way.

My father has a friend that lives in Europe and is visiting my home country, so one idea would be to give that friend around 10k, and have him transfer that money from Europe into my American bank. Would I be in trouble for doing this? Because that friend is not on the deed, so there is no way I can justify having that money from him. Idk, maybe I'm over thinking, but I want to be super cautious, yet not lose so much money!

Any help/ pointers will be highly appreciated.

[NancyNguyen 1,657]

No one can advise you on finance or tax except a tax expert. US doesn’t tax on principal so you are fine with the US, just declare its origin. You will find a way to bring it outside your country legally.

[Rocio0010 5,579]

Just now, NancyNguyen said:

No one can advise you on finance or tax except a tax expert. US doesn’t tax on principal so you are fine with the US, just declare its origin. You will find a way to bring it outside your country legally.

Thank you for your response! I have everything ready to document and declare its origin. 

Just a question, though. What do you mean by "principal"?

[NancyNguyen 1,657]

6 minutes ago, ra0010 said:

Thank you for your response! I have everything ready to document and declare its origin. 

Just a question, though. What do you mean by "principal"?

Principal means your initial money.

[Wouter 141]

I can't really say anything about your idea to channel the money through your father's friend, although keeping it below 10k$ supposedly prevents banks from having to report it to the authorities. But I assume the profit of the sale of the house is more than 10k$, right? If you are thinking of doing multiple $9500 transfers then it is probably going to stand out even more and still get flagged by the banks as suspicious.

However there is another point to pay attention to:

Just because you paid taxes in your home country doesn't mean you don't have to pay taxes in the US. The thing is that the US taxes 'worldwide income' which means that if you had any income or profits from anywhere in the world, as a resident of the US, you have to report it to the IRS. Yes, even if you already paid tax on it in your home country. Some countries have a tax treaty with the US to avoid double taxation, but others do not (a quick Google gives me the impression Argentina does not). So you may want to check with a tax expert in the US on that, because the IRS may not care about a certified document from your home country and still want to take a cut.

 

[Rocio0010 5,579]

44 minutes ago, Wouter said:

I can't really say anything about your idea to channel the money through your father's friend, although keeping it below 10k$ supposedly prevents banks from having to report it to the authorities. But I assume the profit of the sale of the house is more than 10k$, right? If you are thinking of doing multiple $9500 transfers then it is probably going to stand out even more and still get flagged by the banks as suspicious.

However there is another point to pay attention to:

Just because you paid taxes in your home country doesn't mean you don't have to pay taxes in the US. The thing is that the US taxes 'worldwide income' which means that if you had any income or profits from anywhere in the world, as a resident of the US, you have to report it to the IRS. Yes, even if you already paid tax on it in your home country. Some countries have a tax treaty with the US to avoid double taxation, but others do not (a quick Google gives me the impression Argentina does not). So you may want to check with a tax expert in the US on that, because the IRS may not care about a certified document from your home country and still want to take a cut.

 

Hey there! Thank you for your input. No, we would do just one transfer from Europe and then the rest through Argentina. Also, I did talk to a CPA about this and -I can't remember exactly why now- I will have to report it to the IRS, but not pay taxes.