If I was part of a foreign corporation and sold my shares, would I have to pay US taxes when I bring the money into the states?

General
1

I have shares in a family corporation and I want to sell my shares.
If I was to sell and earn 1,000,000, would I have to pay taxes when I bring the money into the USA?
If I did have to pay taxes, how much would I have to pay?

2

You owe taxes when it’s sold, not when it’s brought into the US

3

The U.S. taxes its citizens on worldwide income, so you will need to pay taxes on the sale of shares. For federal, it would be capital gains rate plus net investment income tax rate.

4

Laine said:
The U.S. taxes its citizens on worldwide income, so you will need to pay taxes on the sale of shares. For federal, it would be capital gains rate plus net investment income tax rate.

What do you mean by the capital gains rate?

5

@Marlowe
In general, long-term capital gains are taxed at a lower marginal rate than ordinary income.

6

Are you a US citizen, green-card holder, or resident alien?

7

Ashwin said:
Are you a US citizen, green-card holder, or resident alien?

I’m a US citizen

8

Mica said:

Ashwin said:
Are you a US citizen, green-card holder, or resident alien?

I’m a US citizen

Then u/zeh_shah is correct. You’ll report the sale of the shares on your US tax return in the year you sell them, and pay any tax due. Moving the money from the foreign country to the US will not result in taxes being paid again.

That said, you should be aware of the requirement to file FBAR (FinCEN 114) and Form 8938 (with your tax return). Since you’ve had shares in this foreign corporation you’re probably already aware of that and the requirements you have for filing as a US citizen owner of a foreign corporation: https://www.greenbacktaxservices.com/knowledge-center/foreign-business-tax-reporting/

9

@Ashwin
I would also be concerned whether the “family corporation” qualifies as a PFIC.

10

The calculation of taxes and reporting will be different if the foreign corporation is a “controlled foreign corporation.”

11

Ask a CPA that specializes in your situation, whatever it is. Filing Status, Source of funds, etc. Definitely not an answer you want from ‘I’ll tell you nothing about my filing status or the source of the funds’ Reddit Q.

12

@Blake
What do you mean by Source of Funds, and how is it relevant?

13

Marlowe said:
@Blake
What do you mean by Source of Funds, and how is it relevant?

US sourced vs Foreign sourced, these are tax law terms

14

If you are a US Citizen you have to pay taxes on all income foreign or not.

15

You owe taxes when you sell on your personal return whether you bring money into US or not

16

The U.S. taxes its citizens and residents on their income no matter where in the universe the income is earned or received. Most of the tax rules apply exactly the same regardless of where in the universe you are, with the notable exceptions of the foreign earned income exclusion benefit for Americans working in another country and whatever benefits the taxpayer may be entitled to receive under the tax treaty the U.S. has with the foreign nation in which the taxpayer is residing. See IRS Publication 54, Tax Guide for U.S. Citizens and Residents Abroad for the details.

17

18

Cove said:

Rule 2, hoss.

19

Cove said:

We don’t solicit business here.

20

Cove said: