I recently sold a property in Panama. A capital gains tax was imposed by Panama at time of sale. As a U.S. citizen will I need to pay another capital gains tax?

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    The US taxes all the income of its citizens and tax residents but allows for credits for income taxes (or deduction of income taxes) paid to foreign countries. Whether this means that you effectively pay some US income tax (capital gains tax) or no US income tax (capital gains tax) on those capital gains depends on the applicable tax rates. Jul 11, 2015 at 15:09

1 Answer 1


Yes, you will. You can use form 1116 to calculate how much of the tax you paid in Panama can be credited to your US tax.

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