roma
May 25, 2006, 05:24 AM
I would like to know the tax & legal implications for the following situation:
1)I am a US Citizen with residence in Italy
2)I am the sole-titled property owner of a piece of Italian real-estate
3)This property was granted to my ex-husband in a US Divorce over 1 year ago (3/05)
4)Under the direction of the divorce decree, the property must transfer from my name to my ex-husband's name and then he can handle the property as he sees fit - he intends to sell the property
5)My ex-husband is now asking the judge to force me to grant my Power of Attorney for the sale of the property (i.e. the property would be sold with my name on the title)
During the divorce proceedings, I specifically requested that the property be transferred to my ex-husband's name so that I would not be responsible for US capital gains tax. FYI - there will be no capital gains tax in Italy on the property sale. The profits would not be reinvested in foreign property but would be repatriated to my ex-husband.
It is my understanding, from the IRS, that I would be liable to report the gains and for the capital gains tax on this property if I have to grant my POA to my ex-husband.
Can a judge force me to grant a POA to my ex-spouse for this transaction? My ex-husband is requesting the POA to also avoid title transfer charges in Italy (Italy does not have "quit claim deeds" without a formal title transfer procedure) - but isn't that something that my ex-spouse should have investigated prior to the final divorce decree?
My ex-husband says he will pay the expenses - but I can not risk filing and reporting the capital gains and then "collecting the taxes" from my ex-spouse... This property was a rental property so the tax consequence is, I believe, quite significant.
Thank you for your assistance.
1)I am a US Citizen with residence in Italy
2)I am the sole-titled property owner of a piece of Italian real-estate
3)This property was granted to my ex-husband in a US Divorce over 1 year ago (3/05)
4)Under the direction of the divorce decree, the property must transfer from my name to my ex-husband's name and then he can handle the property as he sees fit - he intends to sell the property
5)My ex-husband is now asking the judge to force me to grant my Power of Attorney for the sale of the property (i.e. the property would be sold with my name on the title)
During the divorce proceedings, I specifically requested that the property be transferred to my ex-husband's name so that I would not be responsible for US capital gains tax. FYI - there will be no capital gains tax in Italy on the property sale. The profits would not be reinvested in foreign property but would be repatriated to my ex-husband.
It is my understanding, from the IRS, that I would be liable to report the gains and for the capital gains tax on this property if I have to grant my POA to my ex-husband.
Can a judge force me to grant a POA to my ex-spouse for this transaction? My ex-husband is requesting the POA to also avoid title transfer charges in Italy (Italy does not have "quit claim deeds" without a formal title transfer procedure) - but isn't that something that my ex-spouse should have investigated prior to the final divorce decree?
My ex-husband says he will pay the expenses - but I can not risk filing and reporting the capital gains and then "collecting the taxes" from my ex-spouse... This property was a rental property so the tax consequence is, I believe, quite significant.
Thank you for your assistance.