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Thread: Selling Russian apartment and transferring the money to the US

  1. #1
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    Selling Russian apartment and transferring the money to the US

    Hi,

    I have an apartment near Moscow that my grandmother left me and it is worth about $150,000. I have a buyer that wants to purchase it, but I am not sure how to get the money from Russia to the United States.

    I am a dual citizen and my parents still live in Moscow, if that matters. I have a U.S. Bank account in the US and Sberbank account in Russia, but could open another one in the US if that will be easier. I am currently living in the United States so would like to avoid traveling to Russia again if possible due to cost.

    How can I safely transfer the money? I am very worried about being scammed or losing half of it to taxes or a fee. I am not wealthy and this is a very large sum of money for me that I will be relying on.

    Thank you so much!

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    1) First, make sure it is worth 150,000
    (If you give me details I'll look up the prices)

    2) For Russia you are a Russian citizen only, and not a resident of Russia (if at least if you do not have a propiska).. Therefore you'll have to pay a 30% tax (= 45000 USD - better to stay in Russia for 1 yr=)) in order not to pay it)


    For a bank transfer you'll need a letter from nalogovaya, that you've paid all duties.

    You can also lower the sum up to say 30,000 (and pay 30% from 30,000), but it's quite risky, particularly for the buyer, and you won't be able to transfer the money out of Russia..

    3) You may also face problems with US tax . although I don't know anything about that.


    4) You may give it to your parents (no duty as you are relatives), they can sell it and then transfer the money to you.
    Un this case only 13% tax and 1000.000 rub untaxed base

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    Your parents may need a power of attorney (доверенность) in order to manage the sale for you. They can get the text prepared at a lawyer/notary in Russia and then email it to you. You can then sign it and get your signature notarised in any Russian Consulate, and then send the document to Russia so your parents can use it to represent you.

    Money can be transferred directly to your US bank account by wire transfer. Sberbank doesn't offer very good exchange rates, so you would be better to use another bank. UniCredit and Raifeisen offer good exchange rates on USD. You may be able to get a good deal since it's a relatively large amount.

    You should keep all of the documentation so that you can prove to the IRS that the money was from the sale of your inheritance and not income.

    Inheritance tax was abolished in Russia in 2006, so there will be no tax due as a result of you receiving the apartment from your grandmother. Income tax (30/13%) is only levied on capital gains (appreciation), not on the whole value of the asset. In addition, assets held for more than 3 years are exempt from capital gains tax. So I don't think there will be any tax, unless the value of the apartment has risen since you received it from your grandmother's will.

    Since you're a resident of the US, you will have to check US inheritance taxes. I'm not sure how they work, especially with foreign assets.

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    Very happy someone else is curious about this. My partner is willing to sell her appartment, valued at $90,000, if I can't stay in russia. We'll use that to cushion ourselves if we are forced to go to the UK. Which neither of us want....
    We had no clue about transferring large sums of money out of Russia, so i opened a thread on it last week. This is extra info for me. Thanks David and Arturo!!

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    Quote Originally Posted by DavidB View Post
    Inheritance tax was abolished in Russia in 2006, so there will be no tax due as a result of you receiving the apartment from your grandmother. Income tax (30/13%) is only levied on capital gains (appreciation), not on the whole value of the asset. In addition, assets held for more than 3 years are exempt from capital gains tax. So I don't think there will be any tax, unless the value of the apartment has risen since you received it from your grandmother's will.
    more than 3 yrs - this works for residents only..
    No appreciation - nalogovaya will take 150k as a base..

    another option for TS..
    give a doverennost to parents..
    sell it for 150k - usually in cash..
    and ask your parents to come to US 15 times with 10k in cash
    (tickets for 600-700$ to NYC are easy to find)

    Do not go to nalogovaya..
    If do not visit Russia for several yrs (I don't remember but smth like 3 or 4) you'll get away with it..

    You'll lose only 6-7% on tickets)

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    Quote Originally Posted by Arthuro View Post
    more than 3 yrs - this works for residents only..
    No appreciation - nalogovaya will take 150k as a base..

    another option for TS..
    give a doverennost to parents..
    sell it for 150k - usually in cash..
    and ask your parents to come to US 15 times with 10k in cash
    (tickets for 600-700$ to NYC are easy to find)

    Do not go to nalogovaya..
    If do not visit Russia for several yrs (I don't remember but smth like 3 or 4) you'll get away with it..

    You'll lose only 6-7% on tickets)
    Is someone who has a 3 year work permit, considered a 'resident'?

    I didn't fully understand what you meant by:
    "No appreciation - nalogovaya will take 150k as a base"
    Could you explain?

    Cheers

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    Quote Originally Posted by Nobbynumbnuts View Post
    Is someone who has a 3 year work permit, considered a 'resident'?
    Only if you've spent 183 days per year in Russia during the past 3 years. Breaks in your residency cause problems.

    Quote Originally Posted by Nobbynumbnuts View Post
    I didn't fully understand what you meant by:
    "No appreciation - nalogovaya will take 150k as a base"
    Could you explain?
    Many people have a problem if they pay cash for an apartment, because they don't have sufficient proof of purchase for the tax service. As a result, they have to pay tax on the whole value of the apartment when they go to sell it.
    I don't think it would be an issue in this case, because the owner will have a document proving when the apartment was inherited and then all that has to be established is what the value was on the date that it was inherited. The difference between the value when it was inherited and the sale price is considered a capital gain/loss and tax is due at 13/30% if there is a capital gain.

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    i can help you to transfer any amounts. write to PM.

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    Thank you all for your help.

    I have one more question for you - I am married to an American (non-russian citizen). My mother back in Russia is claiming that I need to have a document that gives his permission for the sale. My real estate agent did not mention that, but did mention that she needs my marriage license.

    I do not understand why/if this is necessary; he is not a Russian citizen and his name is not on my inherited apartment! I would prefer that he not know about the sale; I discovered his infidelity some months ago and am planning on separating from him.

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    Quote Originally Posted by paradoxical3 View Post
    Thank you all for your help.

    I have one more question for you - I am married to an American (non-russian citizen). My mother back in Russia is claiming that I need to have a document that gives his permission for the sale. My real estate agent did not mention that, but did mention that she needs my marriage license.

    I do not understand why/if this is necessary; he is not a Russian citizen and his name is not on my inherited apartment! I would prefer that he not know about the sale; I discovered his infidelity some months ago and am planning on separating from him.
    Where were you married? If ZAGS, the Russian consulate and other authorities don't know about your marriage, don't tell them.

    You should think about leaving the money in Russia until you are divorced. Hold it in a good bank in Russia (Raiffeisen, UniCredit, CitiBank, etc.) until it's safe to transfer it to the US.

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    Quote Originally Posted by DavidB View Post
    Where were you married? If ZAGS, the Russian consulate and other authorities don't know about your marriage, don't tell them.

    You should think about leaving the money in Russia until you are divorced. Hold it in a good bank in Russia (Raiffeisen, UniCredit, CitiBank, etc.) until it's safe to transfer it to the US.
    We were married in both US and Russia unfortunately...

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    In that case, you should think very carefully about it. Maybe the agent can advise exactly what will be required. I'm not sure of the exact requirements in Russia myself.

    In your divorce case in the US, you will have to declare under oath all of the assets which you own. The court will then decide how they are to be split between you and your husband. You should find a good lawyer to help you get the best settlement you can, because you'll be entitled to some of your husband's assets.

    It may be a good idea to transfer the ownership of the apartment to your parents so that they can sell it and hold the money for you. Once your divorce has been settled, they can transfer the money to you.

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    Quote Originally Posted by paradoxical3 View Post
    Thank you all for your help.

    I have one more question for you - I am married to an American (non-russian citizen). My mother back in Russia is claiming that I need to have a document that gives his permission for the sale. My real estate agent did not mention that, but did mention that she needs my marriage license.
    Officially you do not need a permission because you inherited this apartment,
    and this is not a "совместно нажитое имущество"
    Howewer sometimes potential customer ask for this, just to be sure there will be no claims from a spouse in the future. But as I understand you already have a customer who (I suppose) have a good price for him and officially it is not required

    US court and divorce process usually means nothing for Russian authorities..
    For US court it will be almost impossible to get officially any info about Russian property, since there is no governmental agreement..
    (Unofficially in person it's easy though)
    So you may even think to say that you do not have any property (but better to consult a lawyer)

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    Quote Originally Posted by Arthuro View Post
    US court and divorce process usually means nothing for Russian authorities..
    For US court it will be almost impossible to get officially any info about Russian property, since there is no governmental agreement..
    (Unofficially in person it's easy though)
    So you may even think to say that you do not have any property (but better to consult a lawyer)
    The only problem I see is that she will get divorced and then a short time later, $150k will arrive in her bank account in the US.

    Better to make some arrangements so that it looks like a gift from the parents, I think.

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    Yes, a problem..
    anyway if TS trusts her parents - better to put them in a scheme)

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