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jklin78
Talker
Joined: Mar 03, 2007
Posts: 119
Status: Offline
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 Posted:
July 28, 2007 - 03:34 PM |
 
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| Post subject: property income tax |
For a US citizen, when you sell the property in China and have paid the income tax in China. Do you still need to pay income tax for this transaction in the US? Will the infomation of this transaction get linked to the US ? |
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underh20
Board Legend
Joined: Sep 27, 2006
Posts: 12702
Location: Veggie-Free Zone
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July 28, 2007 - 03:45 PM |
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Yeah, supposedly income produced from the sale of property here is taxable in the US. However, it is next to impossible that the IRS will know about it unless you tell them. |
_________________
"If I need to buy a TV, I'll definitely buy a Japanese TV. A Chinese TV might explode." -- Jackie Chan |
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jklin78
Talker
Joined: Mar 03, 2007
Posts: 119
Status: Offline
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July 28, 2007 - 04:52 PM |
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Thanks. That is good to know. So I assume that the information of the income tax and the sales of the property in China will not be sent back to the US even they sign the agreement for not having the double taxation? |
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underh20
Board Legend
Joined: Sep 27, 2006
Posts: 12702
Location: Veggie-Free Zone
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July 28, 2007 - 05:37 PM |
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No, the Chinese government will not communicate anything back to the IRS unless, maybe, you are involved in money laundering. |
_________________
"If I need to buy a TV, I'll definitely buy a Japanese TV. A Chinese TV might explode." -- Jackie Chan |
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mswp
LoopKicker
Joined: Mar 06, 2005
Posts: 808
Status: Offline
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July 30, 2007 - 05:20 PM |
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Talk to someone who knows expat tax law -- proceeds from a property sale aren't "income." It probably makes a difference if it was an investment property or your primary residence and whether you're rolling the proceeds into another house.
Plus if you plan to take the $$ to the US, you might want to have a different strategy than if you're keeping the money here. |
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underh20
Board Legend
Joined: Sep 27, 2006
Posts: 12702
Location: Veggie-Free Zone
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| Posted:
July 30, 2007 - 06:42 PM |
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| mswp wrote: |
Talk to someone who knows expat tax law -- proceeds from a property sale aren't "income." It probably makes a difference if it was an investment property or your primary residence and whether you're rolling the proceeds into another house.
Plus if you plan to take the $$ to the US, you might want to have a different strategy than if you're keeping the money here. |
Actually, profits you make on the sale of a house (capital gains) are taxable in the US. There are various ways you can reduce your tax burden and certain policies that allow you to keep tax-free up to 1/2 a million in profit (if you are married, 250k if single), but these breaks apply only if the home was your principal place of residence (i.e. you actually lived in the home).
In the past you could roll the money into a new home and avoid taxation, but this changed in 1998. |
_________________
"If I need to buy a TV, I'll definitely buy a Japanese TV. A Chinese TV might explode." -- Jackie Chan |
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