RE: It had to happen eventually... Crypto weeding out ICOs and BTC & ETH look safe
Thank you for all this information and your perspective. I think I will refrain from trading Steem so that I avoid having to pay a lot in taxes. Otherwise I might suffer a net loss in trading Steem and still owe taxes on top of that!
I think taxes is a good topic you can write about, and it would help inform your readers + the general public.
The house I bought was under my wife's name since foriegners are not allowed to own land in the Philippines, but the condo is under both of our names (foriegners are allowed to own condos).
I hadn't reported it to the United States since I thought I only needed to report it once I sold it, or made money via rentals.
I am not sure if I should call the IRS first, to let them know I failed to report my condominium, or if I should contact someone else first. Paying a CPA would be difficult for me at this time.
Thanks for all your insight!
Ouch... OK, so here's my $0.02 worth on this (and it's not legal or financial advice)...
If you are a US citizen (or your wife is), then you are obligated to disclose the ownership of any foreign asset where the collective value of all assets combined exceeds $10K. This is called a FBAR statement and it is an annual form you are required by law to file. It is actually a FINCEN form, but a number of years ago they turned over the management of this to the IRS. It is usually filed with your tax returns per year.
The IRS have a problem with labor resources. There is not enough of them. Congress constantly reduces their budget. So they have moved to a more effective policy of reducing down the number of human audits, and focus on penalties for not filing (or incorrectly filing) forms. For example, a single missing FBAR form for a year is a $10K penalty. And this goes back year or year. My wife has a retirement account in Australia with more than $10K in it, and a few years back we discovered the obligation to file this, and had to employ attorneys to fix the mess. That cost me $1500 in legal fees, but thankfully because it was not a willful error, they were able to get away with no IRS penalties at all. However this was at a time that the IRS had a voluntary disclosure program in effect and we took advantage of that. I'm not sure if that is still available.
Being a US citizen and living offshore is a nightmare these days. You get caught up in some politician's mission to capture all tax avoiders with Cayman Island bank accounts, and you get thrown into that pile. Most retirees that I know who are living in Mexico or Costa Rica or something like that face this every year and you can hear the screams here in the USA from far away.
What I would suggest is that you research this carefully. This is our attorneys, and thankfully they have a HUGE YouTube channel with all the details on it: https://www.youtube.com/user/irsmedic
They can guide you if you need assistance. I'm not trying to freak you out - you have enough on your plate, but you should be informed and aware of this stuff as it may have impact to some of the things you are doing or plan on doing in the future.
Hope this helps.
Thank you @k0d3g3ar I appreciate your help. I'll look at the link you supplied.
You motivated me to write a blog article about this. Here: https://steemit.com/bitcoin/@k0d3g3ar/us-taxpayers-and-crypto-don-t-get-along-that-well
It's a good article @k0d3g3ar and I resteemed it 👏👏👏
I just got off the phone with IRS Medic @k0d3g3ar.
The lawyer I spoke to said that I didn't need to report the real estate I purchased, and the income I received from the sale of our house didn't meet the $10,000 USD threshold, but I once had more than $10,000 USD in a Philippine bank while I was here. That needs to be reported!
He said that a program for serious non-reporters who were more willful is now closed, but that non-willful reporters like myself can still avail the non-penalty route.
I am very grateful for his help and advice but it will be really difficult for me to convince my wife to pay the $1,500 USD retainer. If I had no choice than I would have no choice but I think I might be able to do the paperwork myself.
I have a lot of documentation covering a mental illness that I've been getting treatment for, and I think I can make an obvious case that I was a non-willful non-reporter, but I plan on paying the lawyer I spoke with $100 - $200 USD for the free consultation they gave me on the phone - I just have to discuss it with my wife first. He was so helpful and so informative!
P.S. Maybe I will write a blog post about them ☺
I'm very happy for you that you chose to address the situation with the best professional advice. I was a bit worried that if you went directly to the IRS without the knowledge of this from proper professionals that you could be trapped into something you didn't need to be in. I take it that if you need a retainer of that size, then there are past filings needed to be done by them. We encountered the same situation and it took 6 years of past filings to cover our previous liabilities for non-willfull lack of filings. They took care of all of this for us, and it was pretty simple - we provided the documentation they needed, and then signed the appropriate forms and they did the filing. I actually hired them again for the 2017 tax year to do the FBAR filings for us (nowhere near the $1500 "cleanup" fees), but just because I don't need to make a mistake in this and the complexities are deep. If you get a chance to review a lot of Anthony Parent's videos on YouTube you will see just how tricky this can be if you don't know what you are doing. I think a simple FBAR is not complex, but often if it is a retirement fund then you have this issue of whether it is a "trust" and then it comes down to whether you have control of it or not. There are different filing requirements for each case and that's why I just chose to pay them to do it. In the end it is peace of mind.
You do start to resent the way that the IRS think they can extort Americans no matter where on this planet they live. There are only a handful of countries that do this - everyone else (incl. my home country of Australia) just do residence based taxation (that is you pay tax where you reside, not both in that local jurisdiction but also to your home country). There's another guy on YouTube you might enjoy "Nomad Capitalist". His name is Andrew Henderson and he is an American who recently renounced his citizenship and chose to live offshore in a number of countries and live the nomadic lifestyle. Not sure if I could do that, but it is interesting to see how someone like him has many passports and does pretty well for himself.
Anyway glad all this information helped you out. I agree - write a blog post about it. These posts live on for a long time and Google will index it and you may just help out the next guy out there too.