Do i need to file capital gains taxes for a property sale in India?

Asked almost 3 years ago - Fairfax, VA

Hi,
About 5 years ago I bought a house in India using the pension money I had been accumulating in India( I worked in India for about 20 years before immigrating to US). I recently sold this property and managed to transfer the proceeds of that sale( about 77K) to my US bank. So, my question what is my responsibility towards IRS and US taxes when it comes to this 77K. Does this qualify as capital gains?
Does this need to be reported anywhere on my taxes?
I dont know if this is relevant or not but I am a US citizen.

Attorney answers (3)

  1. Steven J. Fromm

    Contributor Level 20

    Answered . US citizens are taxed on their worldwide income. So if you sold this property for a gain you must report it as a capital transaction on Schedule C. However, if it was depreciated and used as an investment, first you would need to report this on Form 4797. This would break the gain up between ordinary income recapture and capital gain. If you paid any income taxes in India on this transaction you can claim an income tax credit to offet the taxes due as a result of this sale.

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    Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net . For further tax advice check out his website at www.sjfpc.com . and his blog at <>

    LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia... more
  2. Henry Daniel Lively

    Contributor Level 20

    Answered . U.S. Citizens are taxed on their worldwide income. That means if you had a capital gain in India you would have to pay U.S. Capital gains tax on the income. You would also get a credit for any tax that you may have paid in India.

    Any individual seeking legal advice for their own situation should retain their own legal counsel as this response... more
  3. William F. Kunofsky

    Pro

    Contributor Level 9

    Answered . Sadly, you must pay. U.S. citizens are subject to tax on worldwide income. The U.S. does provide a foreign tax credit to reduce US tax for taxes paid in India. You should pay the taxes due with your estimated taxes to avoid penalty. You also do not mention if you collected rental income on the property prior to the sale.. Check with an attorney for advice in this area.Hope this helps.

    This answer is not legal advice.and does not constitute tax advice. This answer does not provide advice related to... more

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