Proceeds of UK House sale

[Arthur2021 20]

I hope I've put this in the right place. My flat is on the market and my interview is coming up next week at the London Embassy. I was wondering if any of you have taken the proceeds of your property sale to the USA and whether there are any taxes on it when you settled there? It will be used to buy a property within 12months. 

 

Cheers

[Boiler 45,761]

Best to sell before you become a PR

[Crazy Cat 41,985]

59 minutes ago, Arthur2021 said:

I hope I've put this in the right place. My flat is on the market and my interview is coming up next week at the London Embassy. I was wondering if any of you have taken the proceeds of your property sale to the USA and whether there are any taxes on it when you settled there? It will be used to buy a property within 12months. 

 

Cheers

@Boiler is correct.  There is no tax when transferring funds to the US.  However, after you become a legal resident, you will have to report all world-wide income (which could create a tax obligation).  

Edited August 7, 2021 by Lucky Cat

[Crazy Cat 41,985]

***I moved this thread to Tax and Finances During US Immigration*****

Edited August 7, 2021 by Lucky Cat

[JeanneAdil 6,583]

you married a USC in 2018 so did spouse claim you on 2018, 2019 and 2020 tax returns?

if so ,  you have to claim it as foreign income (in the year of the sale)  and file form 2555 to exclude $108,700 -year 2021

as per IRS instructions

Best to consult a good tax attorney on this one (not a tax agent like H&R Block) but tax attorney

We just sold apartment in Morocco and tax attorney told us the following but Adil is a citizen (so consult a real expert)

 

 

When you sell property or real estate in the U.S. you need to report it and you may end up owing a capital gains tax. The same is true if sell overseas property. The U.S. is one of only a few countries that taxes you on worldwide income — and gains made from foreign property sales are considered foreign income.

[Arthur2021 20]

That's good to know. So aslong as it's sold before I enter the USA and get my greencard I'm not liable for any capital gains in the US. 

2 hours ago, Lucky Cat said:

@Boiler is correct.  There is no tax when transferring funds to the US.  However, after you become a legal resident, you will have to report all world-wide income (which could create a tax obligation).  

 

[Crazy Cat 41,985]

44 minutes ago, Arthur2021 said:

That's good to know. So aslong as it's sold before I enter the USA and get my greencard I'm not liable for any capital gains in the US. 

 

If you were not required to report it as income, you would pay no capital gains. In other words, it depends on your tax status for the tax year in which the property was sold. 

Edited August 7, 2021 by Lucky Cat

[Not Active 1]

On 8/7/2021 at 11:06 AM, Arthur2021 said:

I hope I've put this in the right place. My flat is on the market and my interview is coming up next week at the London Embassy. I was wondering if any of you have taken the proceeds of your property sale to the USA and whether there are any taxes on it when you settled there? It will be used to buy a property within 12months. 

 

Cheers

 

On 8/7/2021 at 11:06 AM, Arthur2021 said:

I hope I've put this in the right place. My flat is on the market and my interview is coming up next week at the London Embassy. I was wondering if any of you have taken the proceeds of your property sale to the USA and whether there are any taxes on it when you settled there? It will be used to buy a property within 12months. 

 

Cheers

We also sold our house and then moved. You do not have to declare if you sold before you became a permanent resident. 
 

[Saqib-s 190]

Glad I've seen this thread, I am unlikely to be able to sell my home before I am likely to become a Permanent Resident.  I've owned my home for 3 years, and it's unlikely I will make any profit on the sale. 

 

You may find this useful, regarding what taxes are to be paid on profits of a home sale in the US. 

 

https://turbotax.intuit.com/tax-tips/home-ownership/tax-aspects-of-home-ownership-selling-a-home/L6tbMe3Dy


 

Edited August 31, 2021 by Saqib-s

[Wuozopo 4,293]

On 8/7/2021 at 1:25 PM, JeanneAdil said:

you married a USC in 2018 so did spouse claim you on 2018, 2019 and 2020 tax returns?

if so ,  you have to claim it as foreign income (in the year of the sale)  and file form 2555 to exclude $108,700 -year 2021

@JeanneAdil  Form 2555,  Foreign Earned Income Exclusion,  is not for house sales or investment income.  Those are considered (by the IRS) as “unearned income” and can not be excluded using form 2555.
“Earned income” is pay for personal services performed, such as wages, salaries, or professional fees. 

[JeanneAdil 6,583]

15 minutes ago, Wuozopo said:

@JeanneAdil  Form 2555,  Foreign Earned Income Exclusion,  is not for house sales or investment income.  Those are considered (by the IRS) as “unearned income” and can not be excluded using form 2555.
“Earned income” is pay for personal services performed, such as wages, salaries, or professional fees. 

The above-described potential taxation of the gain from the sale of foreign property in both the United States and the applicable foreign country can result in double taxation for the U.S. citizen. However, there are two possible concepts that could minimize this adverse effect for the U.S. citizen. First, U.S. tax law allows certain taxes paid abroad to create a foreign tax credit. If applicable, the U.S. citizen could reduce U.S, tax liability by the amount of taxes paid in the foreign country of sale. Second, the United States has executed various income tax treaties with other countries that could mitigate the adverse impact of double taxation by the two countries.

 

Been doing taxes for years and take new classes to keep up with changes

[Wuozopo 4,293]

34 minutes ago, JeanneAdil said:

First, U.S. tax law allows certain taxes paid abroad to create a foreign tax credit. If applicable, the U.S. citizen could reduce U.S, tax liability by the amount of taxes paid in the foreign country of sale.

But that’s not Form 2555. Foreign Earned Income Exclusion has nothing to do with gains from a house sale or claiming back foreign taxes paid.  

[Arthur2021 20]

On 8/7/2021 at 7:25 PM, JeanneAdil said:

you married a USC in 2018 so did spouse claim you on 2018, 2019 and 2020 tax returns?

if so ,  you have to claim it as foreign income (in the year of the sale)  and file form 2555 to exclude $108,700 -year 2021

as per IRS instructions

Best to consult a good tax attorney on this one (not a tax agent like H&R Block) but tax attorney

We just sold apartment in Morocco and tax attorney told us the following but Adil is a citizen (so consult a real expert)

 

 

When you sell property or real estate in the U.S. you need to report it and you may end up owing a capital gains tax. The same is true if sell overseas property. The U.S. is one of only a few countries that taxes you on worldwide income — and gains made from foreign property sales are considered foreign income.

I was on a visitor visa on all visits to the USA and have never filed for taxes either alone or via my wife. I have never been a resident.