Overseas inherited property sold at a loss

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misterno
Posts: 526
Joined: Sat Mar 08, 2014 7:55 am

Overseas inherited property sold at a loss

Post by misterno »

I inherited this property 2 years ago overseas. At the time I hired a local real estate appraisal company which valued the property $200K and since then I collected rent also. Now I am selling the property and real estate telling me it only worth $100K

Can I deduct this loss in my taxes? Is there any limit or is there a restriction on overseas properties?

Thanks
codedude
Posts: 69
Joined: Thu Jan 26, 2017 9:15 pm

Re: Overseas inherited property sold at a loss

Post by codedude »

misterno,

Assuming you are a US resident, and the person you inherited from was not, when you inherited the property 2 years ago, you should have filed a form 3520. If you did not do it, there may be penalties.

Did you declare the rent received over the 2 years as income on your tax returns?

Any year one has an overseas bank account and the balance is over 10,000 USD at any time during a tax year, there is an FBAR filing requirement. If this did not apply so far, if you open a new account to receive the proceeds of 100k, it will definitely apply in the year. You may need to file form 8938.

You can deduct the loss.
Last edited by codedude on Thu Sep 05, 2019 6:58 pm, edited 1 time in total.
HomeStretch
Posts: 4978
Joined: Thu Dec 27, 2018 3:06 pm

Re: Overseas inherited property sold at a loss

Post by HomeStretch »

Here is a link to the IRS FAQ about deducting a loss on the sale of a rental property which is reported on Form 4797. The FAQ contains a link to the form and instructions which may be helpful.
https://www.irs.gov/faqs/sale-or-trade- ... xchanges-1
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