My question is: US-specific
QUESTION: Hi,
My wife has an apartment in Russia worth about $130,000 USD that she co-owns
with her sister and mother. They are trying to sell the property and split
the proceeds. The apartment has been in the family for over 30 years and
they no longer want to hold onto it. We are all US citizens and would like
to know if we are responsible for any capital gains taxes.
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david ingram replies:
As a US citizen you are liable for Capital Gains tax on any increase in
value of any item you may own in any country.
You should all report the sale on schedule D. If the property has been
rented out these years, you should also have been reporting the gross and
net rents received on Schedule E.
If the property was there as a family retreat and no rent was received, you
would not have a Schedule E but would have Schedule D to file. It is a long
term capital gain so make sure you do the alternate calculation of tax on
schedule D.
I know nothing of Russian tax but know that they are looking for foreigners
making money in Russia and not reporting it so be very careful that any
Russian reporting rules are abided by.
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