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Anonymous
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mexican tax of home sale
Anyone know how much the Mexican govt. takes when you sell your Mexican home without having dual citizenship, and how much they take if you have dual
citizenship?
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Salsa
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The law changes often.
Don
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Anonymous
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brilliant response, don
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mulege marv
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high
i dont know how much, but being a new home buyer and talking to the seller it is very high (capitol gains) i was told like 30%. but i dont know if
thats right.
Want what you have
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Dave
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If you structure it right you won't pay anything.
Hint:
You can hold a Mexican bank trust through an American (or other country) corporation.
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Bruce R Leech
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it is supposed to be the same for Mexican and foreigners. but keep a close watch.
Bruce R Leech
Ensenada
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Anonymous
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Interesting....a couple I know made a good deal buying a house just off the beach in Puerto Vallarta....it appears it will triple in value in a short
time....someone told them that if they did not attain dual citizenship prior to selling, then the Mexican govt. would take a large chunk of the
profit.....if that were true, if the Mex. govt. took a large chunk, and the US govt. wanted income tax also on the profit......there would have to be
a very large profit to make a foreigner want to buy a home in Mexico as an investment.....
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JZ
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Dave: thanks for the tip. You add a ton of value to this forum, and are a voice of reason.
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Sharksbaja
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| Quote: | Originally posted by Dave
If you structure it right you won't pay anything.
Hint:
You can hold a Mexican bank trust through an American (or other country) corporation. |
So if you are the principles are you also the beneficiaries?
Can a residence be used as a corporate asset?
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bajajudy
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My understanding on this is that you pay about 35% capital gains if you cannot prove that it was your main residence. This can be done through proof
of how much time you spend here each year( Mexico is your home). Generally speaking and theoretically you can do this with an FM3 but it is more
difficult than if you have dual citizenship.
The other problem arises when you start figuring your capital gains. It used to be that everyone tried to keep the value of their property down so
the taxes would be less. If you have done this then the capital gains will be greater...capital gains=the difference in the amount of your investment
and what you sell it for. There are ways to get around all of this but I am not privy to them. All of this is hear say as I have never sold my
property here.
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Bruce R Leech
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don't forget that you must also pay US or Canada capital gains tax on a sail of property in Mexico 
ouch
[Edited on 7-20-2005 by Bruce R Leech]
Bruce R Leech
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dono
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Its 25% of the sale price or 30% of the differance of what you paid for it and sold it for. And It also depends if you bought it already built or if
you built it yourself. If you are a Mexican citizen and hold it for 2 yrs you are exzempt from paying taxes on home but you have to pay a tax on the
lot. There are alot of variables connected to a house sale capital gains tax, thats why we alway use an expert for the closings. Also this is a very
generalized answer, if you are selling in southern Baja we can recomend experts.
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TMW
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"[don't forget that you must also pay US or Canada capital gains tax on a sail of property in Mexico]"
Does the $250,000 single or $500,000 married rules still apply to foreign property? Capital gains in the U.S. above these limits is 15%.
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Dave
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| Quote: | Originally posted by Sharksbaja
So if you are the principles are you also the beneficiaries?
Can a residence be used as a corporate asset? |
1. The Bank is the trustee. The corporation is the beneficiary.
2. An asset is an asset and can be held by the corporation.
[ You need to structure your corporation dependent on country of origin. For instance, there is a 25% transfer rule in Mexico that is enforced by
treaty with the U.S.]
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Bruce R Leech
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| Quote: | Originally posted by TW
"[don't forget that you must also pay US or Canada capital gains tax on a sail of property in Mexico]"
Does the $250,000 single or $500,000 married rules still apply to foreign property? Capital gains in the U.S. above these limits is 15%.
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I don't know for sure. I would consult a good Us tax attorney before closing on any foreign deal.
Bruce R Leech
Ensenada
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The Sculpin
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Remember, a US citizen is taxrd on their worldwide income, regardless of the source. However, you also get a tax credit against US federal tax for any
federal taxes paid to foreign countries (this credit can never exceed the tax that would have been paid in the US if the income was US sourced
income).
OK - that being said, if your house meet the tests for "principle residence", expat US citizens can exclude the gain on the sale of their home.
Basically, the home has to be your principle residence for 2 of the last 5 years. If, as an expat, you lost your US citizenship within the last 10
years preceeding the year of sale, you are out of luck - but this usually applies to people who have revoked their citizenship in order to not pay US
tax anymore. If you can't meet the test, you'll get a tax credit against US tax for mexican tax paid on the gain.
Ahhhhh, who are we kidding...you expats never file US tax returns anyway, so what are you so worried about!
Disclaimer: Free tax advice obtained on the internet is worth exactly what you paid for it - nothing. If you do not consult a pro on issues like this,
you're a complete idiot and deserve everything you've got coming to you, so sack up, get that checkbook out, and go find an expert who will talk to
you about this kind of stuff in a language you'll understand!!!!
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JZ
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I just fired off an e-mail to my attorney.
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bajajudy
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You can only use the principal residence exclusion once in the states.
That's how I got here...capital gains from sale of my house in USA which I did not have to pay taxes on.
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The Sculpin
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You must be one of those expats who can say "I've been here since (pre-1997) ......sorry, but the law changed in 1997 - let's see...that would be
Clinton....(that should create a stir..VRWC members??). A single person can excluded $250,000 in gain, married couples $500,000 every 2 years!!!!
Since you have to have lived in it 2 of the last 5 years to qualify, it stands to reason that you can flip your primary residence every 2 years tax
free (unless you're in California where properties appreciated 3,000% per year).
See above for disclaimer...too much to type.....
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CJ
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There's an article @ www.bajainsider.com/baja-business/capital-gains-mexico01.htm that gives some good information on this subject. Hope this helps.....sorry I don't
know how to highlight the address. CJ 
[Edited on 7-22-2005 by CJ]
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