If I re-finance or get mortgage loan from my existing property in my home country, and move money to the United States, which taxes do I need to pay (Income tax? Interest Taxes?) or what shall I take care about (Capital gain or something else?) for example, the property was bought in $100,000 before, but the current fair market value could be $200,000 now and I might be able to get mortgage load > $100,000. If I get $150,000 from the mortgage loan from bank, would the difference $50,000 be viewed as an income or capital gain?
Let me restate question for clarity.
- Own home is foreign country.
- Bought home for $100,000
- Doing a refinance with cash out ($50,000) option.
Question: Are there any taxes for this transaction?
Answer: (Added improvements provided by Eric)
Generally No. Generally, it is not considered income until you sell and the sale price is greater than the purchase price. But with currency differences, there is an additional complication, section 988 rules apply. It could result in ordinary income or loss.