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Author: jaloti One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121478  
Subject: foreign income and US taxes Date: 12/2/2004 12:48 PM
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Complicated situation with relatives. Essence is this: Relatives own property in a European country, have rental income, and capital gains from regular sales of said property. They are trying to gift property to other relatives. All said relatives are US citizens residing in this country. It is claimed, by those who own the property, that all rental income and cap. gains are not subject to US tax, since the money is all kept in accounts in the country overseas, and since they are paying taxes to said foreign country. I've tried to explain that, AFAIK, ALL income earned by US citizens, regardless of where it is earned, is POTENTIALLY subject to US taxes, and that professional advice should be obtained as to this situation. They claim its not taxable here until the money is brought here, and "everybody knows that."

I guess my question is, while it is never wrong to pay for professional advice, isn't it true that a safe default position is that ALL income is reportable to the IRS, and while their may be credits for foreign taxes paid depending on the country, the IRS taxes a dim view of not reporting income.

any help appreciated
jaloti
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