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Mexican Law/Foreign Inheritance-Mexico

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Question
Hello,


My name is Lisa and I live in Minneapolis, MN. The reason I am contacting you is I am in search of an attorney to help me with my current situation. My father passed away in December and he lived near Piedras Negeras, Mexico. He left a will and left all his assets to me. He was not married and had no other children. He owned a ranch near Piedras as well as a house and duplex. He also had a ranch in Veracruz but has been selling pieces over the last couple of years. I do know there is still land down there, I just don't know how much. I did become a Mexican Citizen in January and I do have an attorney in Mexico who has been taking care of the paper work for me to become owner of my dad's properties. I will be going to Mexico in the next two weeks to sign papers and take ownership. I do trust my lawyer but now that is time to sell I would like another opinion as she has not given me any information regarding taxes at this time. I have two potential buyers for my dad's ranch. Lastly, I have two main questions:


1) When I sell any property in Mexico-Do I pay the taxes or the buyer?


2) If I do have to pay taxes, how much do I have to pay. Also, will I have to pay taxes on the U.S. side?

I've been reading and just get confused. I read about capital gains, no inheritance tax, cost of basis etc.


If you have any knowledge about selling property in Mexico or know someone that does I would greatly appreciate it.


Thank you for your time,

Lisa

Answer
Hi Lisa,

When you sell property in Mexico, the buyer generally pays all fees except ISR (impuesto sobre la renta) which in Mexico a tax on income or capital gains.

In Mexico, ordinary income and capital gains are taxed at the same rate. However, property which has a dwelling may be exempt. If you state that a house in Mexico is your primary dwelling in Mexico and show a water or electric bill, you can avoid the tax for that property.

I really cant advise on US taxes, but as a general rule, as US capital gains tax is less than the Mexico tax, there is usually no US tax liability on properties sold in Mexico. (Unless of course you manage to avoid the tax because of a dwelling).

If live in Veracruz so I might be available to help you out with researching Veracruz property.

My phone number is: 52 1 271 125 2872 and my email is: johnleeward@buholegal.com

Hope this helps.

Regards

John  

Mexican Law

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John Lee Ward

Expertise

I can respond to any question related to Mexican Law and common business practices in Mexico. I can also compare and contrast between the American and Mexican legal systems.

Experience

Licenciatura en Derecho from the Universidad del Golfo en Cordoba, Veracruz. (Cedula Profesional No. 5713238) Maestria en Derecho from the Universidad de Cristobal Colon en Veracruz, Veracruz. (Cedula Professional No. 6358321) Currently a Candidate for a Doctorado en Derecho from the Universidad de Cristobal Colon. 5 years of litigation experience in Mexico.

Education/Credentials
Bachelors in Electronic Engineering, California Polytechnic State Univ. Juris Doctor, Concord University in Los Angeles Licenciatura en Derecho, Universidad del Golfo, Mexico Maestria en Derecho, Universidad de Cristobal Colon, Mexico Doctorado en Derecho (In Progress), Universidad de Cristobal Colon, Mexico

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