[Carolina]

Oops - newbie that I am - I just found I put this in the wrong section...
Thanks for reading and I'll move post again in the real estate section....sorry!

I have conflicting information about selling land owned in Costa Rica. One source says there is a 33% Capital Gain tax due while others state there is no Capital Gain tax for US Citizens. The land is not in a corporation. I am interested in selling and relocating in Costa Rica but this tax amount would sure have an effect on the sale price.
Anyone know the scoop on this?

This post has been edited by Carolina: 15 October 2008 - 03:00 PM

[Kahuna]

Carolina, on Oct 15 2008, 03:48 PM, said:

Oops - newbie that I am - I just found I put this in the wrong section...
Thanks for reading and I'll move post again in the real estate section....sorry!

I have conflicting information about selling land owned in Costa Rica. One source says there is a 33% Capital Gain tax due while others state there is no Capital Gain tax for US Citizens. The land is not in a corporation. I am interested in selling and relocating in Costa Rica but this tax amount would sure have an effect on the sale price.
Anyone know the scoop on this?

I recently spoke with an accountant that does business in the US and Costa Rica and he told me that the IRS is going after these capitol gains.

Living abroad, you begin to realize what a far reaching and intrusive organization the IRS is. There is no other tax collection agency in the world that operates the way that they do. The crazy thing is that they have infiltrated banks all over the world and it is now very difficult to wide you non-US income from them.

Good news, he also told me that if you remain out of the US for 330 days a year, you qualify for a 92K tax exemption.

Which begs the question, if you do not live in the US and you are not making your money in the US, why should the US have in interest in taxing you at all?

[JulieH]

what about Costa Rica? Do they tax capital gains on house sales (in Costa Rica)?

[Kahuna]

JulieH, on Oct 15 2008, 05:21 PM, said:

what about Costa Rica? Do they tax capital gains on house sales (in Costa Rica)?

I do not believe so, my understanding is that they are working to change that.

[Carolina]

Thank you one and all....appreciate all answers. From the amount noted on original purchase and what we could sell for would make a hugh difference if we had to pay 33%. Definitely will stay in over 330 days so that should offer tax creditt but it sounds like we will still have to file/report US tax on profit on sale in Costa Rica - even if it is reinvested in another piece of property in Costa Rica. Something sounds really funky there!

[Kahuna]

I recently spoke to a professional on the subject, but do not rely on my interprations. I was not taking notes and I am not a expert on the subject. Make sure you get professional advice of your own. I would be happy to pass on contact information for the accountant I spoke with.

[Carolina]

Kahuna, on Oct 15 2008, 07:00 PM, said:

I recently spoke to a professional on the subject, but do not rely on my interprations. I was not taking notes and I am not a expert on the subject. Make sure you get professional advice of your own. I would be happy to pass on contact information for the accountant I spoke with.

Thank you Kahuna, I would appreciate contact info for your accountant. It's good to have a name others have found credible. Carolina

[dreaming]

My question is if the IRS is going to tax you then shouldn't they also give you tax credits such as the primary residences exemption I believe $500,000 ?

[jdocop]

I thought that the Capital Gains tax on the sale of a home has several loopholes. One, if you buy another home within two years, you don't have to pay. Two, if this was your primary home, and you replace it with another, you only pay the tax if you made over something like a quarter of a million dollars on the sale, and so on.

[MiamiDavid]

jdocop, on Oct 18 2008, 06:44 AM, said:

I thought that the Capital Gains tax on the sale of a home has several loopholes. One, if you buy another home within two years, you don't have to pay. Two, if this was your primary home, and you replace it with another, you only pay the tax if you made over something like a quarter of a million dollars on the sale, and so on.

When I spoke to my CPA about this issue a year or so ago he mentioned that everything had changed.

Check with a current pro to be sure.

[kenn]

Carolina, on Oct 15 2008, 02:48 PM, said:

Oops - newbie that I am - I just found I put this in the wrong section...
Thanks for reading and I'll move post again in the real estate section....sorry!

I have conflicting information about selling land owned in Costa Rica. One source says there is a 33% Capital Gain tax due while others state there is no Capital Gain tax for US Citizens. The land is not in a corporation. I am interested in selling and relocating in Costa Rica but this tax amount would sure have an effect on the sale price.
Anyone know the scoop on this?

This is a "see your financial advisor" situation, but I have a bit of a knack for this stuff and was briefly paid to deal with other people's money, so I'll tell you that you don't provide enough information and part of what you say may be incorrect. As Kahuna says, it probably does depend upon whether you live in CR and can take the foreign income exclusion, as well as whether the land is a primary residence or investment or what. The part about which I believe you are mistaken is the 33% capital gains tax. Actually, capital gains taxes are the ones that are super low--part of the W "lower your taxes" bit--but the rate you pay does depend upon your other income. At minimum, you only pay taxes on your profit ("gain"), not the whole thing. If you don't feel like fetching the forms and figuring it out for yourself, pay somebody to work it out. It's not that bad, and always good to pay capital gains taxes when those rates are low (which they may not be forever). Of course, we're assuming that you're talking about US taxes. CR or another country would be a different story.