My mom is a US citizen and planning to sell property that is outside the US. Let's say she'll get around US $100,000 for the sale. She plans on getting a check for that amount in her name and depositing in the US. So the questions are:
1) Will there be any taxes on that $100,000? Remember that it's her own money and deposited via check.
2) Would the IRS get notified about the check deposit in such cases (large amount and coming from outside the US)?

Any advice would be greatly appreciated.
Thanks,
CF

Yes, a deposit of that size WILL be reported to the IRS.

There are NO transfer taxes, but she must pay capital gains taxes on the sale of the property using Schedule D.

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Originally Posted by AtlantaTaxExpert

Yes, a deposit of that size WILL be reported to the IRS.

There are NO transfer taxes, but she must pay capital gains taxes on the sale of the property using Schedule D.

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Thank you for the response AtlantaTaxExpert. But I want to clarify that the property was bought and will be sold in a foreign country. Any taxes on capital gains will be paid in that country and the NET will be, let's say, the equivalent of $100,000 (after taxes). In this scenario, will my mom still have to pay capital gains in the US as well?

Since ALL world-wide income must be reported on your mother's tax return, yes, she still must report the capital gains on Schedule D. Any tax due may be offset by claiming the Foreign Tax Credit using Form 1116.

1. All U.S. citizens and residents must report worldwide income.
2. Another filing requirement is Form TD F 90-22.1 and/or 8938 Specified foreign financial assets (SFFA). Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income

MukatA is right about the FBAR and Form 8938 (FATCA) requirements which I failed to mention.

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Originally Posted by AtlantaTaxExpert

MukatA is right about the FBAR and Form 8938 (FATCA) requirements which I failed to mention.

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Thank you for the replies.
One more question:
Do non US citizens (say US permanent residents) also have to declare sale of foreign property? Or does the rule only apply to US citizens?
Because in my mom's case, the house is joint with my sister who is not a US citizen, she's a US permanent resident.
I guess one more question comes to mind then:
Can my sister deposit the $100,000 in the US with no tax consequences?
Again, thank you for all the good advice!
- CF

If your mother files as a resident, she must declare all world-wide income.