[pacmancr]

Greetings!

So, here's the background to my question:

I'm a foreign national under H1B visa living in the US since late 2007. For the upcoming 2008 taxes, I will be filing as a resident alien as I meet the substantial presence test.

A few years ago (2002) my brother and I received a house back in our country (Costa Rica) as an inheritance from our mother. As per the local law, we are both co-owners of the property (50% each). We both lived there until I left in June 2006 and I eventually ended up here in the US. My brother still lives in that house.

Now, my brother wants to buy my half of the house. So, there is a chance that I'll get some money (around 30.000 USD) wired into my bank account as an outcome of this sale (sale price minus all taxes and fees we have to pay in Costa Rica).

Form 1040NR says, for capital gains or losses from sale or exchange of property, to "enter only the capital gains and losses from property sales or exchanges that are from sources within the US and not effectively connected with a US business".

Since the source of my house is not connected to sources within the US, does it mean that I don't have to declare these 30k? Or am I totally off here and I do need to declare the 30k and pay some sort of tax on it?

Thanks in advance for shedding some light on this one!

[MukatA]

For 2008, you will file resident tax return. On the resident tax return, you must report your worldwide income. Sale of property will be reported on schedule D. However, you can claim foreign tax credit by filing form 1116. Read : Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income

If the property you are selling was your main home and you meet certain requirements, then you can exclude gain of up to $250,000. In that case you do not even report the sale on your tax return. Read Your U.S. Tax Return: Profit From the Sale of Your Home