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Taxes on Property Sold in Peru
My U.S. citizen mother will sell her home in Peru that was built in 1985 and in which she lived until 1995. She now wants to buy investment property in the U.S. with the sale's proceeds. How much taxes will she pay in the U.S. Can she do a 1031 Exchange? Would depreciation affect the amount of taxes being paid?
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She will pay tax on the gain recognized. She probably can qualify for the 15% rate on long-term capital gains. She cannot do a 1031 exchange as foreign real property is not of a like kind as U.S. real property. Her tax basis in the property would be reduced for depreciation if she rented it. |
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