If I make an investment in foreign real estate, do I need to pay tax in U.S. on the realized profit?

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PepsiLime July 21, 2010 at 8:43 pm: If you are a US citizen you are taxed on your worldwide income, so yes you would pay tax in the U.S. on the realized profit for an investment in foreign real estate. You would get a credit though for taxes that you had to pay in the foreign country on the real estate once you sold it, but it might not be a $ for $ credit.
MukatA July 21, 2010 at 9:11 pm: 1. A U.S. citizen or permanent resident must report all the world wide income. So if you have profit from the foreign real estate, you need to report it on schedule D.

2. If you had to pay taxes on the profit in the foreign country, then you can claim foreign tax credit by filing Form 1116. This credit will appear on line 47 of Form 1040.

IF I MAKE AN INVESTMENT IN FOREIGN REAL ESTATE, DO I NEED TO PAY TAX IN U.S. ON THE REALIZED PROFIT?