Posted on: 21st Oct, 2010 03:42 am
My father (who is in his late 60's and a US citizen) owned property in Costa Rica. He owned the land and a home on the land since the early 80's. The home was demolished 3 yrs ago b/c it was vacant and looters had set up living quarters there. He sold the land through a POA this past month and called to tell me he wants the money of the sale divided amongst his 3 adult kids. The money is sitting in a bank account in C.R. What is my responsibility in terms of taxes? Is this considered a gift? Do I have to report the sale and $ to the IRS and pay state and federal taxes? Does he have to report the income as his, he technically will not received it? He says he does not want to be involved in anything and just wanted to do this for his children. He is a cranky old man who comes and goes out of our lives. It is hard to communicate w/him. He told me to contact the POA in C.R and I have. The POA told me that after expenses, there is $39,000 to be divided for the 3 kids. Do I just have the POA do 3 separate bank wire transfers to each person's bank account here in the US? Can I go there and get the cash? Any input is appreciated. Thank you
Hi isla2isla,
As the property is in your father's name, the income generated from the sale of the property will be considered as his income. If he is gifting you the money, then he will be liable for paying the gift taxes if the amount crosses the exemption limit. You can ask the POA to do 3 separate wires to transfer the money.
As the property is in your father's name, the income generated from the sale of the property will be considered as his income. If he is gifting you the money, then he will be liable for paying the gift taxes if the amount crosses the exemption limit. You can ask the POA to do 3 separate wires to transfer the money.