I am a NRI holding US Citizenship. I would like to repatriate INR (India) to USD from my NRO account from the proceeds of a property sale. I have paid all the taxes for the capital gains in India. I will be transferring the balance after taxes from my Indian bank using the standard repatriation procedures in India (filling forms 15CA and 15CB). My question is w.r.t taxes in the US. Should I pay tax in the US for the repatriated amount? Is that treated as Income from a foreign asset (capital gains) in the US? What is the tax rate? What IRS forms should I fill in the US? Thanks

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    Have you been declaring on your US income tax returns the income you receive in India, such as interest on that NRO account, any rental income from that property you just sold, and the capital gains on the sale of that property? US citizens owe tax on their worldwide income, and get credit for taxes paid to other countries against the tax due to the US. So, if you declared the capital gains on your US tax return when they occurred (or will be declaring them on your 2020 tax return), then the money you bring back is your own money and you don't owe any US tax on that. Otherwise...... Commented Aug 18, 2020 at 21:26

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You need to declare your income, not the amount you move to the US.

So if you had capital gains on property in India, or any other income, you need to declare that on your US tax return. It makes no difference how much - if any - of that money you move from India to US.

Note that this doesn't necessarily mean you will be taxed twice. India and US have a Double Taxation Avoidance Agreement. But you must declare all of your income as instructed. Not doing so is tax fraud.

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    The capital gains need to be reported on. the income tax return for the year in which the gains were made, which is a matter that far too many US citizens of Indian origin tend to ignore. If the OP received the capital gains before 2020 but declares the capital gains on his 2020 return, he will have perjured himself twice; once when he signed the earlier return affirming that it was a true and complete declaration for that year, and again when he signs the 2020 return affirming that it is a true and complete declaration of his income for the 2020 tax year Commented Aug 19, 2020 at 20:23
  • Perjury can only be committed in a legal setting. If there is a mistake in the tax return, it can simply be amended. Sure there might be an associated penalty with the amendment but this is by no means a serious nor criminal offence.
    – nikhil
    Commented Sep 10, 2020 at 20:42

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