Advice needed - foreign investment tax implications

San Francisco, CA · Member since 2017 · 14 posts · 4 votes

Hi, I wonder if any CPA can help shed some light on this situation: If a green card holder with foreign assets want to buy a home in the US, what are the tax implications if he/she transfers money state side for a down payment on the house? What if this down payment is transferred directly to an escrow account from a foreign account? Do they have to pay taxes on this money? Does it trigger an IRS inquiry(since it’s a large sum?) Are there any other implications ? Thank you in advance for your replies.

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Shannon Wright

Escrow Officer · Temecula, Ca. · Member since 2016 · 418 posts · 152 votes

Depending on the situation, the buyer may be subject to FinCen vetting requirements. There are no taxes addressed on the escrow side during a purchase. From what I know, the sale of the property will trigger a possible tax liability with a required withholding of about 18 1/3% of the gross sales price (fed and state taxes). There are still year-end tax filing requirements, too, but I can only speak about the escrow requirements. :)

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Shannon Wright
Escrow Officer · Temecula, Ca. · Member since 2016 · 418 posts · 152 votes
8y
Depending on the situation, the buyer may be subject to FinCen vetting requirements. There are no taxes addressed on the escrow side during a purchase. From what I know, the sale of the property will trigger a possible tax liability with a required withholding of about 18 1/3% of the gross sales price (fed and state taxes). There are still year-end tax filing requirements, too, but I can only speak about the escrow requirements. :)
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
8y
@Valentine Sviatocha

If you have foreign accounts in excess of $10,000(at anytime during the year) - you may be required to report those accounts via filing the Fincen Form.

To avoid money laundering - you may need to vet the money coming from overseas.
You should talk with a lender and see what funds would qualify to use for the 20% down payment.
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Brian M Sweeney
MBA, CFP®, EA · Columbus, OH · Member since 2018 · 175 posts · 207 votes
8y
There is a lot that goes into this question. It’s not simply one answer
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Valentine Sviatocha
OP
San Francisco, CA · Member since 2017 · 14 posts · 4 votes
8y
@Shannon Wright thank you so much for your reply. This definitely helps!
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Valentine Sviatocha
OP
San Francisco, CA · Member since 2017 · 14 posts · 4 votes
8y
@Basit Siddiqi thanks! Appreciate your input!
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