1. What kind of US tax are you talking about -- income tax? Or something else?
2. What kind of tax are you talking about (6% other country) -- you said "property tax." Was this actually an income tax?
3. What country was it?
4. Do we have a tax treaty with that country?
If your client is a US citizen or resident alien who files an income tax return in the US, then he reports on worldwide income, including this property sale.
Income from a Sold Property outside US
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Income from a Sold Property outside US
Situation: A client sold a property outside the US. After selling the property, the client paid 6% for the property tax to the country where the property was located. I understand that a client has to pay 20-25% for the tax here in the US. So my question is/are:
First: What form should I use to report the income?
Second: If the client has already paid the 6% tax outside the country, How will it be declared?
Will the 6% tax that was paid be part of the deduction? Or should I just automatically deduct the 6% from the 20-25%?
Please advise. Thanks.
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