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How does buying or selling real estate change my US expat taxes?


Buying or selling real estate abroad has a drastic effect on your US expat taxes. Any gains on the sale of real estate are subject to taxation. However, if you have lived in the home as your principal residence, you are able to exclude up to $250,000, or $500,000 for those who are married and filing jointly. Please note: even if the real estate income was abroad, it is not considered foreign earned income and therefore not excluded by the Foreign Earned Income Exclusion. You must also take into consideration the currency fluctuations, as this does have an effect on how much capital was really earned by your purchasing and selling of real estate overseas. Gains from real estate can put you into a different tax bracket and drastically increase your US expat tax obligation. It is wise to talk to a tax planner before investing in real estate abroad.

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