bsolutered03[at]gmail.com wrote:

- quote -

I do not know the specific provisions of the Spanish tax
treaty but, in general, US tax treaties with other nations
do not except capital gains from taxation.

Also, I do not know Spanish tax law. However, I will assume
that you would be liable for any Spanish taxes on your gain.
You will also be subject to US tax on any gain. You do not
have to report anything to IRS just because you bought the
property. If you rent it out, you will have to report the
rental income but you can claim any related deductions,
including mortgage interest, property taxes, management
fees, etc. This income may also be subject to Spanish
taxes.

Rental income does not come under the Foreign Earned Income
Exclusion, so it is fully taxable on your US tax return. If
you do pay Spanish taxes, you would be entitled to a credit
against your US tax for some, if not all, of such taxes.

If you are not familiar with the foreign tax rules, it might
be a good idea to seek the assistance of a professional who
does have experience in this area. Not all tax accountants,
whether CPAs or EAs, know the foreign tax rules. In my
years of working with expats, I've seen a lot of returns
prepared incorrectly. Be sure your accountant is
experienced in this area to be sure you get sound advice.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I have a question for someone with knowledge of
international tax laws and U.S. Tax Treaties.

My question is on tax laws regarding a purchase of property
in spain.

I have saved enough money to purchase a small apartment
close to the beach in southern spain, however before I get
into the purchase, I would like to know the following:

If I purchase this property do I have to disclose the
property on my US Tax returns?

and I don't plan on keeping the property for more than 2
years. When I decide to sell it, I assume I will be paying
Spanish taxes on the sale of the property, possibly as
capital gains if there is a gain?

When the property is already sold, money will most likely be
placed in a spanish bank account. When I transfer the money
to my US account, will I be liable for any further taxes, or
because I paid spanish taxes, I will not owe any US taxes?

This information is crucial to my purchase, so any help
would be very much appreciated. I will be trying to purchase
the property by the end of the month...

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >