Immigration tax payment

Capital gains tax on real estate = (selling price-selling cost-adjusting cost price) x capital gains tax rate.

For those who hold less than 1 year, according to the short-term capital gains tax, the tax rate is the highest tax rate for declaring individual tax, that is, the higher the income, the higher the tax rate, with a maximum of 39.6%.

If it exceeds one year, it shall be calculated according to the long-term capital gains tax. The highest tax rate is 20%.

If the annual income exceeds 200,000, there is still a net investment income tax of 3.8%, but Trump made it clear that he would cancel this tax.

Many people have doubts about the adjusted cost price. Especially the domestic real estate, has appreciated several times. If calculated according to the cost price of the year, 90% of the house price may be taxed. Before landing in the United States, many new immigrants will also find an appraisal company to appraise the domestic houses and notarize the appraisal report, hoping to use the appraisal price as the cost price in the future.

It is not clear whether this practice is accepted/rejected in the explicit provisions of the IRS. At present, there is also a lack of public cases to prove the feasibility of this method.

Then, if the IRS explicitly says no in the future, will all immigrants to the United States have to pay taxes to the IRS on their income from selling houses in China? Actually, it is not. Many people ignore that we have to pay personal income tax when we sell a house in China. Take Shanghai as an example, the tax rate is 20% of the house price difference. Just because China is a seller's market, this tax is actually paid by the buyer for the seller. Moreover, there is a direct tax treaty between China and the United States, and the tax paid in China can directly offset the tax burden of the United States. So as long as your name is written on the tax bill when you sell the house, you can use it to offset the tax.

In addition, there are tax incentives for buying and selling self-occupied houses in the tax items of the IRS. Specifically, as long as you have lived in this house for two of the past five years as your main residence, you can enjoy the capital gains from selling the house tax-free for both husband and wife's $500,000. This clause also applies to overseas properties, which means that new immigrants can sell their houses in China within the first three years after landing in the United States, and the difference between the purchase and sale is equivalent to $5.9 million, which is tax-free.

Are you relieved after reading these? American taxes are not as terrible as you think. But the key is to study more, study more and communicate with professionals more. Seeing what others do, I do the same thing instead of following other people's advice. There is no such thing as failing to blame the public in the United States.

Remember that after landing in the United States, you must know and understand the law, and don't break the law!