Wife’s friend is moving back to Thailand

[chrisandsu]

Hi all and please forgive me if this is in the wrong section . My wife’s friend who has lived in the USA for the last 30 years has retired and is planning on moving back to Thailand . Her house has recently sold and she made quite a healthy profit . My question is will she be hit with capital gains tax if she takes all of the profit out of the country and into Thailand ? 

[mrwebb8825]

My guess would be no as she would be liable for taxes in the US and the 2 countries have a tax treaty.

[Yellowtail]

She will likely have to pay taxes in the US, but as income was generated in the US, it will not be taxed in Thailand.

 

If the house has already sold, it is a little late to start trying to minimize the tax load. 

[glamont002]

If the house was her principal residence the first $250,000 of gain is exempt from US tax. If married filing jointly then $500,000 exempt. 

[mrwebb8825]

22 minutes ago, glamont002 said:

If the house was her principal residence the first $250,000 of gain is exempt from US tax. If married filing jointly then $500,000 exempt. 

not in all states

[Pilot3Boz]

Federal taxes are the same in all states.... 

[KannikaP]

9 minutes ago, Pilot3Boz said:

Federal taxes are the same in all states.... 

But let's wait and see what happens after tomorrow!   LOL

[khunPer]

On 10/31/2020 at 5:27 PM, chrisandsu said:

My question is will she be hit with capital gains tax if she takes all of the profit out of the country and into Thailand ?

If she transfer the money into Thailand in the same calendar years, as she earned them, she is in principle due tax from foreign income; however check with the Double Taxation Agreement (DTA) between USA and Thailand about capital gain tax on real estate. You can find the DTA HERE.

 

Quote

ARTICLE 6

Income From Immovable (Real) Property

1. Income derived by a resident of a Contracting State from immovable (real) property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

...

 

If she transfer the money the following calendar year, or any later year, it's considered tax free savings.

[khunPer]

4 hours ago, mrwebb8825 said:

My guess would be no as she would be liable for taxes in the US and the 2 countries have a tax treaty.

The answer might however be that she due to a DTA (i.e. your "tax treaty") can be taxed in that other state, where she sold the real property...