Best ways to bring capital from overseas back to US

Rental Property Investor · Denver, CO · Member since 2018 · 1 post · 0 votes

I’m in the process of selling a property in Australia, where due to it being my primary residence previously there is no capital gains tax due (similar to the exception here). I’m a dual Aus and US citizen. I’m now living in the US again and the plan is to bring the proceeds to the US to reinvest in real estate.

Are there legal ways to avoid/minimize paying taxes on the proceeds as they are transferred to the US?

0 Reply

29 views

Most Popular Reply

Court Haas

Rental Property Investor · Melbourne Australia · Member since 2018 · 1 post · 1 vote

The transfer of the money back to the US is irrelevant to whether you owe tax in the US or Australia. As you are a dual citizen, you'll need to include the sale on both your AU and US tax returns and follow the relevant rules by country on whether you get a main residence exemption. The transfer of the proceeds is secondary and not a taxable event.

From a US tax perspective in order to be exempt from capital gains, you need to have owned and lived in the residence for 2 of the past 5 years prior to sale.

From an Australian perspective, Jordan is right, you need to determine if you are an Australian Resident for tax purposes. If you have been living back in the US for the entire fiscal year, you may not be an AU Resident for tax purposes anymore. The AU government is about to change the rules on being able to claim the main residence exemption if you are considered a foreign resident. The new rules which are expected to go into effect on 1 July 2019, would not allow you to claim the main residence exemption if you sell the property while considered a foreign resident. Have a read the following links:

https://www.ato.gov.au/general/capital-gains-tax/your-home-and-other-real-estate/your-main-residence/

https://www.ato.gov.au/General/Capital-gains-tax/International-issues/Foreign-residents-and-main-residence-exemption/

In terms of transferring money back to the US, I've used OFX.com.au for many years, but Transferwise noted previously is also good. Whatever you do, don't use your AU bank as their rates are usually up to 200bps worse than third party providers like OFX or Transferwise.

As most have noted, speak to an accountant in each country to get formal advice.

1 Reply

See this reply in the discussion

5 Replies

Jump to latestLatest

Sort by

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
not sure US would have a tax on that CPA would know.. just use forex exchange and wire the dough
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
0 Reply
Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
7y
Transferwise: Best way to transfer money between people. Great exchange rates.
Check with your CPA, but I don't think you pay any taxes just to transfer the money.
The US laws do extend worldwide though, so potentially you will have to pay something on the capital gains, but you do that probably even if you don't transfer the money back to the US.
We do have a 1031 exchange law, but I don't think you can 1031 funds from Australia to US investment property, but you might ask a 1031 expert about that.
You might also check to see if Australia has any kind of tax treaty with US so that you don't pay double taxes. Capital gains there and here.
Congratulations and welcome home.
0 Reply
Jordan Sinclair
Investor · Adelaide, South Australia · Member since 2015 · 136 posts · 78 votes
7y
Not advice but check if you're a Australian resident for 'tax purposes'. This may affect how much CG you pay.
0 Reply
Court Haas
Rental Property Investor · Melbourne Australia · Member since 2018 · 1 post · 1 vote
7y
The transfer of the money back to the US is irrelevant to whether you owe tax in the US or Australia. As you are a dual citizen, you'll need to include the sale on both your AU and US tax returns and follow the relevant rules by country on whether you get a main residence exemption. The transfer of the proceeds is secondary and not a taxable event.
From a US tax perspective in order to be exempt from capital gains, you need to have owned and lived in the residence for 2 of the past 5 years prior to sale.
From an Australian perspective, Jordan is right, you need to determine if you are an Australian Resident for tax purposes. If you have been living back in the US for the entire fiscal year, you may not be an AU Resident for tax purposes anymore. The AU government is about to change the rules on being able to claim the main residence exemption if you are considered a foreign resident. The new rules which are expected to go into effect on 1 July 2019, would not allow you to claim the main residence exemption if you sell the property while considered a foreign resident. Have a read the following links:
https://www.ato.gov.au/general/capital-gains-tax/your-home-and-other-real-estate/your-main-residence/
https://www.ato.gov.au/General/Capital-gains-tax/International-issues/Foreign-residents-and-main-residence-exemption/
In terms of transferring money back to the US, I've used OFX.com.au for many years, but Transferwise noted previously is also good. Whatever you do, don't use your AU bank as their rates are usually up to 200bps worse than third party providers like OFX or Transferwise.
As most have noted, speak to an accountant in each country to get formal advice.
1 Reply
Federico Gutierrez
Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes
7y
Bring it back in BTC.
Sure you have been declaring taxes in Both AUD and USA so that is a question for your CPA.

I strongly believe the 1031 exchange option is not possible for you from country to country.
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.