Question for the Money Doctors
Question submitted on Jan 5, 2013.
My parents are retired and live in another country, India. They''ve worked and paid taxes on their income there. They are now planning to immigrate to the US, as I sponsored their permanent residency here. If they decide to bring their life-savings here, will they get taxed on their savings? They will be paying Indian taxes on it already. Please advise.
Your parents will not be taxed on the value of the savings assets that they are moving to the US. However, assuming they become US residents, they will be taxed on the income that their assets earn. If they are Indian citizens they will probably still be required to pay tax on their worldwide income to India. They may be able to receive a credit for the US tax that they pay, and there may be some exemption from double taxation depending on treaty provisions.
Your parents should also consider estate planning issues, and there may be a requirement to report to the US any foreign assets that are owned, including property, investments and bank accounts that are maintained in India.
Multi-national taxation is a complex area, and a tax professional who is versed in taxes in both countries should be consulted. Visit www.findacpapfs.org to find a CPA/PFS near you.
For additional information visit http://www.360financialliteracy.org/