- posted 10 years ago
Just learned that taxpayer owned a house in Bolivia. She emigrated
from that country many years ago and is a longstanding US resident and
citizen. The house was built by her family in stages over time before
she moved to the US. Additional improvements were made to the house
and ownership eventually passed to her. It?s unclear whether she
became owner before moving to the US and becoming a citizen. Any
paper trail with all legal and financial documents remains in Bolivia.
During her time as a US resident and citizen, she would occasionally
use the house during visits with her family. It has been primarily
occupied by a house sitter although it was occasionally rented. Real
estate taxes were paid annually. No rental income has ever been
reported, nor has any depreciation ever been claimed. It isn?t quite
clear how to determine the basis of this property. In Nov 2009 it was
sold for $180,000, with commission and taxes of $10,000.
Where to start? Although it?s tempting to do otherwise, since no
documentation would have gone to the IRS, I assume the gain from this
sale, if any, is reportable. Not sure if it?s worth the time and
effort to reconstruct the rental property history? Could she have
been claiming a foreign tax credit for the real estate taxes paid?
Ideas and suggestions warmly appreciated.