Taxes How to handle proceeds of real estate sale

[Talute]

Amidst discussions on navigating the complexities of real estate transactions in these challenging times, a particular question has yet to be thoroughly addressed:

Consider a scenario where you sell a property and receive payment in dollars, either in cash locally or through a wire transfer outside Argentina. When it comes time to file your asset taxes at the end of the year, a dilemma arises. Since you no longer own the property, AFIP may inquire about the fate of the proceeds. While one could declare having the funds secured in a safe deposit box, it becomes challenging to assert that the money simply vanished.

Given that asset taxes in Argentina are meant to be paid on global assets (if I'm not mistaken), how are others managing this situation?

 

[DaveDed]

There are currently two intricate issues to consider:

1. The challenge of a buyer securing dollars to complete the payment for the sale of your property.
2. Even if the payment is made in dollars, the next hurdle is figuring out how to wire the money out of Argentina.

I've heard of potential solutions involving transfer agents, purportedly legal and reliable, though I haven't personally tried this method. On a positive note, it's essential to know that you are not obligated to pay asset taxes on cash deposits in Argentine banks. The value of cash money in a bank account is exempt from asset taxes (bienes personales), providing an option for those comfortable leaving their money in an Argentine bank until a viable method for international transfer is determined.

Best of luck in navigating these challenges.

 

[WillyMe]

You have to declare all cash deposits and get taxed on money in a current account but don't get taxed on money in a savings account.

There are currently two intricate issues to consider:

1. The challenge of a buyer securing dollars to complete the payment for the sale of your property.
2. Even if the payment is made in dollars, the next hurdle is figuring out how to wire the money out of Argentina.

I've heard of potential solutions involving transfer agents, purportedly legal and reliable, though I haven't personally tried this method. On a positive note, it's essential to know that you are not obligated to pay asset taxes on cash deposits in Argentine banks. The value of cash money in a bank account is exempt from asset taxes (bienes personales), providing an option for those comfortable leaving their money in an Argentine bank until a viable method for international transfer is determined.

Best of luck in navigating these challenges.

 

[DaveDed]

You have to declare all cash deposits and get taxed on money in a current account but don't get taxed on money in a savings account.

Let's clarify this point unequivocally: cash funds deposited in Argentina in a savings account do not factor into the calculation of your total assets for bienes personales (asset tax). What you referred to as a "current account" is equivalent to a "checking account" in other countries, known as "cuenta corriente" in Argentina. Personally, I avoid keeping substantial amounts of money in a checking account unless it's necessary for check-related transactions. If your accountant is assessing your taxes in this manner, they may be incorrect, and you could be paying taxes on funds that are not subject to taxation.

For accurate information, I recommend consulting the tax code on the AFIP webpage or seeking advice from another accountant.

 

[Talute]

Certainly, as per my accountant, if you're a temporary or permanent resident (or citizen) of Argentina, it's mandatory to declare and pay taxes on your global assets. While many Argentines maintain bank accounts outside of Argentina, not all declare them. There's a growing trend globally where banks are expected to enhance cooperation in this domain, pressuring citizens and residents to fulfill their tax obligations.

Until recently, there might not have been significant concerns about AFIP's keen interest or ability to access this information, but given the evolving landscape, it's wise not to underestimate their capabilities now.

 

[earlyretirement]

Yeah, I think it does depend on what type of account it is. But I made the BIG mistake of declaring my offshore accounts when I was applying for residency and then after that I got taxed on them each year. It's best to consult your accountant about it and what types are taxed or not.

Almost NO Porteños declare their assets outside of Argentina. I posted in another thread, I'm sure Argentina will be more aggressive at least in tracking down Porteños that travel abroad all the time and then compiling a list of people and the places they are going to often and then checking public records to see if they own real estate there.

As far as banks, I seriously doubt you will get banks around the world agreeing to cooperate with Argentina/AFIP. Other countries yes...but Argentina..No because of their pariah status in the international banking community.

As far as if you have to declare that cash... for all AFIP knows, you had debts you had to pay off, or you gifted that money to family members (if you're American you can legally gift away $13,000 per person) so for all they know you gave a $13,000 gift to each one of your kids, your parents, your siblings, your cousins, etc.

The plain truth of the matter is it's almost impossible for Argentina to enforce any assets that are outside of Argentina. Heck, they have a hard enough time getting Porteños to pay what they owe INSIDE of Argentina.... they think they are focusing more on that.

But I still tell my Porteño friends that own properties in Miami and Florida to get their properties out of their name ASAP. They all just purchased under their own names which is silly due to the worldwide asset tax rule in Argentina.

 

[earlyretirement]

Edit: I forgot to mention the $13,00 US per person gifting is totally TAX FREE for both parties.

 

[BenVeo]

Edit: I forgot to mention the $13,00 US per person gifting is totally TAX FREE for both parties.

i think you are supposed to.

 

[earlyretirement]

i think you are supposed to.

Yes, you are supposed to but almost no one does it. Some important business leaders or politicians WILL declare the token offshore account but most certainly don't declare all of them.

Then each year my accountant has to show an updated copy of that bank account. It needs to match up.

My accountant actually advised me many many years ago NOT to declare it but I didn't really understand the white/black thing back then and didn't want to break any laws.

LOL. I laugh now after knowing how it all works.

People don't think about the liabilities of getting permanent residency in Argentina. Really if you can avoid it...that's better. And if you can't, just be careful with your assets overseas.