# Tax problems



## roopsingh60 (Aug 12, 2012)

BigFella said:


> I am an Australia citizen who has been living/working in the U.S. as an expatriate under an L1-A visa since September 2008. Just recently, my company has asked me to locaize to US payroll. As an expatriate, I have been living in rented accomodation in Phoenix, funded by my company. Contractually, my company has been handling all US taxes up until now and I have been paying Australian taxes using a "hypothetical tax" approach to handling my tax situation (i.e. I'm taxed as if I was still living in Australia).
> 
> However, to "localize" to the U.S. I need to sell my home in Australia (which is still my "principle place of residence"). The house was purchased in 1999 for $456,000 and had about $400,000 of improvements in 2000. Indications are it will sell for around $1.4m. Do we need to pay capital gains tax to the US IRS on the sale of my principle place of residence in Australia ?
> 
> ...



Hi DA,
I facing exactly same situation, I am Australian living in CA since 2007, did you find any good CPA? , please let me know

thanks mate
roop


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## AussieAdventurer (10 mo ago)

Hi everyone, finding this post a decade later. Keen to find contact information for that Ca company - they sound very good. (Living in US for 25 years, but need to complete a filing with ATO).


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## Moulard (Feb 3, 2017)

I cannot help you with a company, but I can walk you through what you probably need to know... at least at a high level..

I presume the driver for an Australian return is a CGT event of Australia situ assets - most likely real estate - given you have chosen to revive this thread...

Australia will have the right to tax the Capital Gain on Australian situ real property, and the US will have right to tax it by virtue of your tax residency..

Given the length of time you have been in the US, it is worth noting a couple of things on the AU side of this...

Assets you acquired before CGT started on 20 September 1985 are not subject to CGT. 
The 50% capital gains tax (CGT) discount is not available for assets acquired after 8 May 2012. 
The buyer of your property must withhold 12.5% of the purchase price if the purchase price is over $750k 
You would only need to file a tax return in Australia if the amount withheld did not equal the amount owed.

The ATO provides a nice little calculator to help figure it all out (note I have not used it.. but I presume it will cover your circumstances)









Calculating your CGT


Use the calculator or steps to work out your CGT, including your capital proceeds and cost base.




www.ato.gov.au





Australian tax returns tend to be far simpler to file than US but given the length of time you have been outside Australia...the hardest part might be setting up a mygov account to be able to file online.

According to the relief from double taxation clause in the treaty you will be able to claim a tax credit for Australian taxes paid on the sale of the property.

Ultimately, the way Article 22 works is that you end up paying the higher of the two tax rates..


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## AussieAdventurer (10 mo ago)

Thank you Moulard! Are you by chance available to chat? I would expect to pay you for your time. I am in a rather odd, but quite simple situation - and not sure how to proceed. My tel # here is<snip>

I'm grateful for your quick response, and surprised. I did not really expect anyone to read my addition to the thread, given the amount of time that had passed. - Grant.


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## Bevdeforges (Nov 16, 2007)

I need to remind you that it is not a good idea to post personal contact information on a public message board or forum like this. You can exchange contact information by starting a "conversation" with a forum member. Simplest way is to click on the other person's avatar on any message they have authored. Use the "message" button on the lower right side of the panel you get. Or, go to your own avatar on the menu bar at the top of any forum page. From there click on Conversations.


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## Moulard (Feb 3, 2017)

AussieAdventurer said:


> Thank you Moulard! Are you by chance available to chat? ? I would expect to pay you for your time.


If you want to discuss specifics that you don't want out in public by all means start a conversation as Bev suggests. Although you may need 5 posts to be able to start one so I can reach out to you if you like.

Note that I am just a dilettante who is quite happy to share my understanding and thus would not ever entertain the idea of payment. 

If its out of my wheelhouse entirely I will let you know.

Unlike the IRS, the ATO is also generally quite helpful and their international number is +61 2 6216 1111 ( 8.00am–5.00pm Monday–Friday AEDT) 

If large sums of money are involved then obtaining administratively binding advice or a private ruling may be advisable.


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