Dear David Ingram,------------------------------------------------------------------
I have a question regarding bringing money into the
I am a green card holder and I have received it
through my wife (She is an American Citizen) a few
months ago and therefore I have not filed any tax
papers till today.
I live in Iran at the moment and I will be moving to
the United States (California) in the next month to
continue my studies. I have a property in Iran which I
will be renting it during my stay in the States. How
would it be possible for me to receive the monthly
rent money from Iran (legally ofcourse), without
having to pay any kind of tax on it in the states ( As
I will pay tax for it once in Iran).
Or if one day I would sell the house, how can I bring
the money in ?
If there is too much sensitivity on Iran, I can also
receive the money from another country such as Dubai
(If that would help).
How do you think I should handle this money transfer
in order to avoid any tax problems ?
Any help or advise from you would be highly
david ingram replies:
The second you receive your green card you will become taxable on your world wide income in the United States whether you earn it from wages or services or whether it is investment inocome such as rent, capital gains, interest or dividends.
You will pay your tax in Iran first and then report the gross and net amounts after expenses again on US schedule E which will be part of your US 1040 tax return. Any tax paid to Iran will be a credit on the 1040 by filing US form 1116.
I recognize that it may be difficult to transfer money directly from Iran to the US. However, the paper trail wouild be better if you could do so. If not and Dubai has to be an intermediary, use it. Just keep a good paper trail.
With a wire transfer, you do not need to fill out any US forms, the bank will do it for you.
When and if you sell, the profit from 'when you entered the US to actual sale' will also be taxable on your US return. I think that Iran has a flat capital gains tax of 25% but am not positive so you will have to check this further.
However, if you do pay capital gains tax to Iran, it will also be a tax credit on form 1116 after reporting the capital gain on schedule D.
This older Question will likley assist you or you and your wife to understand the paperwork.
What forms do I have to fill out if I am transporting more than $10,000 across the American Border ============================== david ingram replies: The forms are 104 and 105 for the US if you are taking money in or out of the US.
The US bank will report the deposit or withdrawal to the US FINCEN on form 104 which you can find at: http://www.irs.gov/pub/irs-pdf/ffc104.pdf When you move the money out of the USA, by money order or check, the bank or financial institution will report it again. The US penalties for failure to fill in these simple forms is up to $500,000 PLUS 5 years in jail. If you remove more than $10,000 at any one time, the bank will report those transactions as well. If you decide to carry the cash or transport it in or out of the USA as a cashier's cheque, you have to file form 105. You can find the form at: http://www.irs.gov/pub/irs-pdf/ffc105.pdf