Advice needed - foreign investment tax implications

5 Replies

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.

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. :)

@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.