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    dfrench13's Avatar
    dfrench13 Posts: 1, Reputation: 1
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    #1

    Apr 22, 2009, 07:36 AM
    Capitol gains in Bajo, California, mexico
    I purchased a piece of land in san felipe, baja California, mexico for the amount of $200,000.00 American Dollars. I am now selling it for $250,000.000 American Dollars.

    My land was apprasied at $388,000 Pesos. The developer Bruce Parkstrong. Is trying to charge me $10,000 american dollars in Capital Gains tax.

    If the land is appraised in Pesos then the value of the land is somewhere around $120,000 american dollars. I think he is ripping me off. Not to mention he wants me to write the check to him and not the government.


    MY husband passed away 2 years ago and this is all I have. Bruce is aware that my husband died. I have so far paid out in American Dollars $38, 342.46 to Bruce his company SEAMEXICO REALTY PLAYA DE ORO BEACH DEVELOPMENT THIS COST IF FOR ESCROW AND TITLE ETC, ETC,

    AFTER THEY DEDUCT $10,000 AMERICAN DOLLARS FOR THE SO CALLED CAPITAL GAINS I WOULD HAVE PAID $48,342.46 MAKING MY PROFIT $1,657.54 I KNOW THAT THIS IS WRONG HOW OR WHO DO I SPEAK WITH IN MEXICALLI TO FIND OUT WHAT EXCATLY IS MY CAPITAL GAINS.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Apr 22, 2009, 09:45 AM
    You have a right to be suspicious. The developer should have NOTHING to do with collecting any capital gains taxes. At least that is the case in the United States. Who knows how it is handled in Mexico.

    My first call would be to the local office of the Mexican treasury department to see how such taxes are handled.

    The next call is to a reputable Mexican law firm to review the documents associated with the sale to make sure they are being handled properly.
    IntlTax's Avatar
    IntlTax Posts: 831, Reputation: 23
    Tax Expert
    		  
    #3

    Apr 23, 2009, 05:33 AM

    It is not unusual for taxes to be withheld on the sale of real estate. The U.S. requires withholding under the FIRPTA rules. See Code § 1445.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Apr 23, 2009, 10:36 AM
    Granted that withholding taxes on the sale of real estate is normal practice in the U.S. but in Mexico, you have to be on guard to make sure that the withholding is not a front to just steal the money. That is why I recommended she get a Mexican lawyer involved to represent her interests.
    IntlTax's Avatar
    IntlTax Posts: 831, Reputation: 23
    Tax Expert
    		  
    #5

    Apr 23, 2009, 10:39 AM

    Agreed. It is always important to talk with an advisor when dealing with large sums of money.
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