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  • 1 Post By Freetrader

US Long Term CGT

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  1. #1

    Join Date
    Feb 2009
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    Gulf Region, ex Mid-Levels
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    US Long Term CGT

    A question for us unfortunate US taxpayers here.

    I've noticed that in the soon to expire tax breaks that long term CGT is zero for long term gains for those on lower incomes living in the USA. My question is this.

    Capital gains tax in the United States - Wikipedia, the free encyclopedia

    If you are living overseas and are earning an amount under the Foriegn Income Allowance amount plus rent, do you qualify for the zero rate? If not how is the threshold calculated?

    BTW I will also be seeking professional advice, but would appreciate input from someone who might have been in this situation before.


  2. #2

    Join Date
    May 2010
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    foreign EARNED income exclusion is only for EARNED income like wages.
    Foreign Earned Income Exclusion - What is Foreign Earned Income

    for any cap gains (ST or LT), you needs to report it and probably pay taxes on it.


  3. #3

    Join Date
    May 2010
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    Back in California (finally!).
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    If I interpret your question correctly, what you are really trying to ask is whether the US foreign earned income exclusion and the housing deduction can be used to reduce the effective capital gains tax rate that applies to your income. The answer is "no". Your CGT rate will be determined on the income tax rate you would be paying prior to making these deductions.

    fth likes this.