How do you transfer currency money to the United States without them taking out taxes?
- Monday Nov 23,2009 02:46 AM
- By diddy
- In Others
The reason why Im asking is because My husband and I have a house in mexico, and we have a few people interested in buying the home. If we do sell it how do you transfer the pesos into dollars, does the United states take taxes out, or how does this work?
do you know how much in taxes? or does it just depend on how much we sale the house for?
Currency Money, Mexico, Reason, Taxes, Transfer Money, United States
3 Comments
The United States won’t withhold taxes, but Mexico might.
You would have to declare the gain (difference between selling price and cost, less adjustments for depreciation) on your United States tax return.
If you pay any tax to Mexico, you would get a foreign tax credit on your United States tax return.
1. Mexico will charge you taxes because the property is in Mexico. if so, take a credit for the taxes paid on your US return (form 1116).
2. The US will tax you on worldwide income, so you must report the sale of the property on schedule D. It’s your responsibility to pay the the US taxes.
You convert pesos to dollars on the day of the sale.
Your sale would fall under foreign assets and possibly under Mexican tax laws as well. Your lawyer will likely automatically make sure that the appropriate taxes are paid to the Mexican government during the deed transfer. Once you file your taxes in the US next year, depending on the amount, you may have to declare the income from the sale.
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