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My husband and I are keeping our home in Indiana and are building a house in Jaco where we expect to live 6 months out of the year. We were setting up an SA Corp until the discussion about probate came up on this blog, as we are Seniors. So we are now looking at the LLcorp.
My questions are:
1. We expect to have a mortgage on the house in CR. What impact does the interest we pay there have on taxes we pay in CR AND our personal income tax paid in the U.S.?
2. When the house is sold, how is the “gain” figured and how would that affect what we pay on our income in the U.S.?
Thanks, RebeccaYou might want to search the site for the word ‘Zamora’ who is the WeLoveCostaRica.com recommended Costa Rica tax professional.
Send him a quick email and he may be able to help with ‘some’ of your questions…
The problem with “tax professionals” here is that you can either find a good US tax professionsla OR a good Costa Rica tax professional, but finding both in the same person has not been possible in m experience.
Scott Oliver – Founder
WeLoveCostaRica.comRebecca, we, too, have a mortgage here in Costa Rica. It’s new in 2006, so we haven’t yet filed our U.S. income tax return including it, but when we do we expect to fully deduct the interest. The only question I raise would be about the deductibility of interest on the mortgage on a second home, but I’m confident it is deductible. The presence or lack of a mortgage should have no impact on your Costa Rican tax situation.
We have an excellent, professionally-qualified (Michigan State University MBA) American tax consultant here in Costa Rica who should be able to answer your question in a heartbeat. You can e-mail me for his e-mail address (daveandmarcia@racsa.co.cr).
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