My husband (Peruvian and US citizen) and I (US citizen) recently sold our home in Lima, Peru for $250,000. The sale is subject to Peruvian taxes and the funds are deposited in a bank in Lima. Can we transfer the funds to the US and do we have to pay taxes on the proceeds again?

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Originally Posted by mejane46

My husband (Peruvian and US citizen) and I (US citizen) recently sold our home in Lima, Peru for $250,000. The sale is subject to Peruvian taxes and the funds are deposited in a bank in Lima. Can we transfer the funds to the US and do we have to pay taxes on the proceeds again?

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You do have to report the sale on your US income tax return, and calculate the capital gains tax due (assuming you have a gain on the sale). However, you can also take a foreign tax credit on your US tax return for income taxes paid to other countries, so depending on the Peruvian taxes paid you may not actually owe anything additional to the IRS. As for transferring the funds from Lima to the US - there are no tax implications but you may have to report the transfer since it's in excess of $100K.