[katyaid]

Hi everyone. I am looking for advice on how to send money from Russia to my US bank account to buy a house. I have an apartment in Russia , it is on my name. I want to sell it and transfer the money to my US bank account so I could later buy a house in US. My mother also wants to add some more money to help me buy it.
My questions are:
1. If I sell my own apartment in Russia and transfer money here, would I have to pay any taxes?
2. If my mom gives me some money as a gift do I pay taxes for it?

Thanks a lot in advance.

[AtlantaTaxExpert]

There are NO taxes for the transfer, but you may have to submit Form 3520 to show the source of the funds.

[katyaid]

Thank you, but do I have to pay income tax on those money coming from abroad? The first situation is when I sell my own property obroad and bring money to US an second is when I receive money as a gift from my mother. Thanks.

[AtlantaTaxExpert]

There is NO income tax on the transfer.

However, if you are a U.S. citizen or resident, you must report the sale of the apartment as a capital transactions using Schedule D. You then pay taxes ar capital gains rates (either 5% or 15%) on the capital GAIN of the sale.

[katyaid]

Thank you for your answer. What exactly is a capital Gain? How do I calculate it? What if I use all money from the sale to purchase a home in US?
What if my mother gives me a sum of money as a gift to purchase a home? Do I pay income tax for these money?

Thank you.

[AtlantaTaxExpert]

A capital gain is the "profit" that results from the sale of a capital asset like real estate or stocks. You realize a gain if you sell the asset for more than you paid for it. You suffer a capital loss if you sell the asset for LESS than you paid for it.

You MAY have a gain from the sale of your apartment, but, more likely, the sale qualifies for an exemption oif you lived in the apartment for at least two of the last five years. If that is the case, and the gain is LESS than $250,000, then the sale is exempt and you have no requirement to even report the sale.

If your mother gives you money, NO income tax is due. The only possible tax is a gift tax, and your mother would pay that, but only if she is a U.S. citizen or U.S. resident.

[katyaid]

Thanks a lot for your answer. My mother is neither US citizen no resident. Is there any maximum limit that she can give me which is not going to be taxed? And also, when later I report this gift do I have to submit any proof of that gift? I mean does that gift contract between me and my mother have to be on the paper or she can just transfer me the money without any additional papers? Thanks again.

[AtlantaTaxExpert]

There is NO limit as to the amount she can gift to you, nor is there any requirement that you document the gift.

The only issue may be when you transfer the money into the U.S. While no tax is due, the transfer will probably have to be reported using Form 3520.

[katyaid]

Thank you so much for answering my questions but I have another one: this apartment (actually 3 of them) were given to me by my mother as a gift? I have a gift contract for these transactions. Does this change my situation? Or if I sell them I still have to pay income tax on the gain? I did not live in them because I was living in US for tha last 8-9 years. What if I sell them with no gain, for the same price my mother baught them? How does this change the situation?

[katyaid]

There is NO limit as to the amount she can gift to you, nor is there any requirement that you document the gift.

The only issue may be when you transfer the money into the U.S. While no tax is due, the transfer will probably have to be reported using Form 3520.

Re: But in case of audit if there will be some questions about this how do I prove that it was in fact a gift?

[AtlantaTaxExpert]

If it comes to that, a signed statement from your mother will be sufficient proof.

[katyaid]

Thank you very much!!

[katyaid]

Just one more thing, what about if I receive an apartment as a gift from my mother and later sell it, is it going to be taxed? Thanks a lot.

[netineti]

Katya,have you solved your problem,I'm interested what is the way you transferred money from russia to us?thanks

[tom11tom114]

What if you are in a similar situation but have sold a car overseas and are transferring that money into a U.S. account? What would be the tax implications on that situation? If anyone can advise me that would be great!

[AtlantaTaxExpert]

Again, there are no transfer taxes, and no reporting requirement unless the amount transferred is $100,000 or more.

There is no tax on the sale of the car unless you sold the car for MORE than what you paid for it.