Taxes on a sale of foreign property?

Actually, you have to pay tax when you sell it. When you move the cash is irrelevant.

It's a long-term capital gain, reported on line 8 of Schedule D of the 1040. It's not only the best way, it's the only way. Depending on your other income, it will be taxed at either 5% or 15% (this year) or zero or 15% (next year).

See IRS Publications 550 and 551.

Thank you for your prompt response. Now I know what type of tax I will have to pay, so I can do some more research online (mainly to see whether I will have to pay 0% or 15%). Thanks.

Check the cost basis documentation at the time of the gift to see if you can raise that to the legal maximum estimate, and you might also look into the exchange rate of the Zloty / US$ at the time of the gift (I'll leave it to someone else to take a stab at this, but if the Zloty has appreciated since the gift, I wonder if you must pay tax based on today's exchange rate, or if there is some loophole whereby you can translate into dollars based on the date of gift exchange rate

- my guess is that any currency appreciation is also a long term capital gain, and vice-versa for any currency depreciation, but you might check to make sure). Even though the property was inherited (I'm guessing) the basis is whatever the value was at the time of the transfer of ownership, and you pay capital gains taxes on that - note that if you sell this year, taxes will be due April 2008. If you sell during 2008 taxes will be due April 2009.

dapperdobbs wrote in news:0a71723d-032b-41aa- snipped-for-privacy@i29g2000prf.googlegroups.com:

For me it was not good. When I inherited, the dollar was high, but I kept the euros for a while. Then every time I sold euros for US$, I had a capital gain. I think you have to look at it a bit like shares of stock. You inherit X shares then valued at $Y. If the dollar appreciates 10$ vs the euro, you now have X shares at $Y*1.1. When you sell, that is a 10% cap gain (reduced by exchange fees).