Hi and thank you for your help, my Father is a U.S. citizen, originally from Italy. He is 86 years old and has been living outside the U.S. since 2004, spending time in Colombia and Italy.

He was the owner of a home in Italy since 1954, his sister lived there until 2008 when she passed away. My father never collected rent for that home. He owned the home since 1954 and just went there again to Italy in 2004. He spent time there for periods or 6 months up to 18 months at the time.

In 2009, this month, he sold the home.

He went back to Colombia where he lives with my family.

The check for the sale of the home will be deposit in a bank in the U.S. in his account.

He would like to know, how much taxes will he have to pay the IRS ? The home was sold for about U.S. $100.000.00? Thank you for your help.
Caterina-

Caterina:

If he lived in the house for 24 months of the last 60 months that he owned the home, then the house qualifies for the $250,000 tax exemption, and he does not even have to report the sale on his tax return.

If not, he will have to pay capital gains on the sale, probably at a 15% tax rate. The exact amount of tax owed will depend on what he paid for the house and how much he spent improving the house over the years.

Suggest you hire an experienced tax consultant to help prepare his 2009 return.

And if he paid any Italian taxes on the sale, he can claim them as foreign tax credits to reduce his U.S. tax.

Also your father must file Form TD F 90-22.1 (FBAR) before June 30, 2010.

Since the cash is coming directly to a U.S. bank account, unless he has a foreign bank accout that you did not mention, no Form TD F 90-22.1 is required.

Thank you so so much for all your help, I will tell my Father all of this. THanks again. :)