How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TaxRobin Your Own Question

TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 13314
Experience:  International tax
14155347
Type Your Tax Question Here...
TaxRobin is online now

US Tax Return - Sale of property continuation. Following

Customer Question

US Tax Return - Sale of property continuation. Following on from my question about foreign mortgage interest, here is an example of what I asked about: http://www.greenbacktaxservices.com/blog/expat-taxes-buying-selling-real-estate-abroad/

Please see the section: US Expat Taxes and Selling Real Estate Abroad

This shows there is a liability on the mortgage based on the difference of the 2 exchange rates?

Please can you advise.

Submitted: 10 months ago.
Category: Tax
Expert:  TaxRobin replied 10 months ago.
I read what they said and I disagree. I do not know that company nor do I agree.
Customer: replied 10 months ago.

When you say you disagree, are you saying that such legislation does not exist?

Does the US Tax system / IRS/ Federal law have this legislation?

Expert:  TaxRobin replied 10 months ago.
Not as far as mortgages. I notice they listed no relevant tax law as their source.
Customer: replied 10 months ago.

Ok thank you. If not for mortgages, what does the legislation apply to?

Expert:  TaxRobin replied 10 months ago.
When you have "cash" from another country that you exchange or you have investments that are in another currency.
Customer: replied 10 months ago.

I have found another site which has a source:

http://www.maximadvisors.com/2013/06/foreign-residence/

Please see: Taxation of Exchange Rate Gain

(Revenue Ruling 90-79, 1990-2 CB 187)

Expert:  TaxRobin replied 10 months ago.
An individual may not offset the gain (or loss) realized from the sale of a personal residence with a loss (or gain) realized on the repayment of a nonfunctional currency denominated mortgage loan used to finance the purchase of the residence.The mortgage does not change the sale.
Customer: replied 10 months ago.

I'm not sure what the above means but there are many websites citing the same. I do not want to pay extra tax, however I am really worried that this mortgage interest is an issue. Please kindly see below which provides reference to the Revenue Code:

http://www.taxadvisorypartnership.com/blog/us-tax/uk-property-and-mortgage-exchange-rate-gains/

'With apologies for citing the technical references, section 988 of the Internal Revenue Code deals with foreign currency transactions and includes becoming a borrower under a foreign mortgage e.g. a GBP mortgage to buy a home in the UK. Under the US law predating Section 988, the borrowing and repayment of a mortgage loan is a separate transaction from the purchase and sale of the property. The repayment of the mortgage constitutes a closed and therefore, taxable transaction and as such there are usually tax consequences for a US person who redeems their UK mortgage or indeed any other non-US dollar loan.'

Expert:  TaxRobin replied 10 months ago.
I will agree to do more research on your behalf and this issue.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    6894
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Last | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    6894
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    1772
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    464
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2596
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    268
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions