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Sale of Real Estate in Colombia

U.S. Income Tax for Rental Real Estate sold in Colombia.

For U.S. expats, when selling a rental property located in either the U.S. or Colombia, the professionals at can help you navigate the unique tax circumstances.

Colombia’s real estate market has been quoted as “are an absolute global bargain” and popular artists like J Balvin, Karol G, and Nicky Jam in their remix to “Poblado” have literally sang about famous El Poblado penthouses. It’s no surprise that we have seen flocks of U.S. investors looking to scoop of their own piece of Colombia’s real estate offerings. 

Pair this with the increase of tourism to Colombia. As the old reputation of being plagued with cartels and violence begins to totally disappear, Colombia has created very attractive market for foreign investors to own rental properties in Colombia.

U.S. Taxes for Selling a Rental Property Abroad

In the U.S., if you sell a property, you’ll need to report it and may need to pay a capital gains tax. The same rule applies if you sell property outside of the U.S. In addition, a capital gains tax comes into play anytime you make money from an investment, such as selling property, stocks, or bonds.


Any gain that you earn can be taxed at different rates depending on:

Filing status

Your current tax rate and how much income you have

How long you owned the property

This is divided into a short-term gain (if you held it less than one year) or long-term gain (you owned it for more than one year). Usually, there are reduced tax rates for long-term gains.

How much money you made

What you paid for the property and how much you sold it.

U.S. Taxes for Selling a Rental Property Abroad help for expats expert team accountants

Selling a rental property in Colombia or any other foreign country, it can become a bit more complicated than selling in the U.S. When it comes time to actually report the sale of a foreign rental property, which forms you need depends on various factors, and if the sale wasn’t in USD, then you’ll need to calculate the exchange rate at the time of the sale.


When selling a rental property in Colombia, some of the possible forms involved in the filing include:

Form 4797– since a rental property generates income and is not your residence, you must report on form 4797 as a “sale of a business asset.”

FBAR/FinCen Form 114  if money from the sale is deposited into a foreign account and exceeds the reporting limits.

FATCA Form 8938  if money from the sale is deposited into a foreign account and exceeds the reporting limits.

Double taxation and the sale of a rental property in Colombia

With the sale of your rental property in Colombia, you likely will have to pay the equivalent of a capital gains tax to the DIAN. However, it is very unlikely that you will be double-taxed with the IRS. There are different strategies to avoid double taxation, such as the Foreign Tax Credit, that your tax preparer can apply to your return.

Consult with For Selling a Rental Property

It’s essential while selling a rental property in the U.S. or Colombia to understand all the tax implications from licensed and experienced tax professionals. If you’re thinking about selling your property, or it’s already sold, get in touch with to confidently report and file all according to your reporting requirements. 

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