U. S. Taxation

Raeven · Posted: Mon Apr 12, 2004 4:07 am Post subject: U. S. Taxation

To those who are migrating from the U.S. to New Zealand and are selling their homes outright:

Can anyone give us a notion of the tax consequences in the U. S. for doing this? I've been trying to contact a tax professional in our area to find out the answer to this question, but of course with tax season upon us, getting a call back or an appointment has proved impossible.

Our intention is to sell our home outright, realize our equity and reinvest that equity in a primary residence in New Zealand plus a couple of rental properties. We're clear on the tax consequences to us in New Zealand of doing this, but have not been able to find out what the IRS has in store. (Insert rude cartoon here of sad-looking person bent over a chair with pants down around ankles.)

Any and all replies will be received most gratefully.

Rae

richsadams · Posted: Tue Apr 13, 2004 4:51 am Post subject: Taxes

Hi Rae

If you are going to realize more than $500,000 USD profit on the sale of your home, you will be subject to capital gains tax (assuming you are married). Eek

In other words, if you purchased your home for $250K and are selling it for $750K, then you'd be responsible for paying CG tax. A situation not unheard of from where I came from, the San Francisco Bay Area. Otherwise, you're free! Mr. Green

As you are asking the question here...and please don't take this the wrong way...I'm guessing you aren't in a tax situation where an accountant is a necessity...soooo....let's get the heck outta here!! Nice One

Raeven · Posted: Tue Apr 13, 2004 8:50 am Post subject:

Hi, Rich,

How did I just know you'd be the guy with the answers?? Thanks so very much!!

Actually, as I was posting my query here, my husband was searching the IRS website and came up with the answer you gave. I was frankly amazed the IRS was liberal in this area!

And you're right, I usually do our taxes (used to prepare them years ago for a living and still retain marginally enough knowledge to wade through the forms now), but we're basically working slobs with a couple of small side businesses and no need of an accountant.. <sigh..> We'll do much better in New Zealand.

Best of luck to you and yours -- and hey, you're leaving soon, right? Please keep in touch with us here!

Thanks again, Rae

richsadams · Posted: Wed Apr 14, 2004 5:04 am Post subject: Taxman

Hi Rae

Yes, I think the $500K allowance was passed back when another administration was favoring the wealthy. Adjusted for inflation, it should probably be around $1.5MM by now! Laughing

Those poor people selling ther mansions are subject to such terrible burdens you know!

Yes, if the good Lord will allow it, we should be out of here by May 30. fingers crossed

Funny thing is...our CATS received a permit to enter the country before we did!! Nutcase

Go figure.

Agreed we will ALL do much better in Godzone!! Wink