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Greek bank accounts or Greek real estate??The IRS may come calling!.

Most American residents with Greek bank accounts and or Greek real estate have been calling us about the ton of new Greek tax filings and regulations(many of which are described in our Firms website.Believe me when I tell you that hundreds are calling about the Greek 'HARATSI').I will be talking about these in future entries in this Blog.However most are not aware that new US regulations involving Form FBAR require all Greek bank accounts to be annually declared to the IRS if they exceed the amount of $10,000. This declaration must be made by owners or those who control the accounts. The penalties for non complience are severe. It irellevant that the money is not in a US affiliated bank,is in Euros or has not been wired or transferred to the US.We have been busy filing these for our clients.  It also bears repeating that the US will tax US residents and or citizens on worldwide income.  That means that if you collect rents in Greece you must declare them in the US. If you sold gifted, bought or inherited property in Greece you must declare the capital gain in the US.  If you collect interest in Greece on accounts or omologa(bonds) you must declare it in the US in that tax year. It doesnt matter if you declared and paid income tax on these in Greece.The Greek Tax Authority (Athens Branch for foreign residents) will tax al Greek source income for US residents. But you must also DEclare this Greek source income on the tax return n the year it is realzed in Greece.Since we not only have Greek tax attorneys on our team--we have also US tax lawyers with LLM'sin tax and accounting, we can amend and file your IRS filings in the US if you have neglected to do this. There are two tricky parts:One is the computation of the IRS Foreign Tax Credit against Greek tax paid and the exemptions and deductions allowed. These need to be proven by Greek documents--but thankfully, we have two Greek offices staffed with lawyers who speak both languages to do this.The second tricky part is,if the property sold is inherited property, how do you compute the basis--ie the income on the sale. Without going into technical detail here, what we have to do is go back and calculate the Fair Market Value of the  real estate inheritance when your relative who left it to you died and add to that all expenses ,costs, improvements  etc.. .This gets complex not only because we have to go years back but value in those days may have been in Drachmas.A brief related issue: You say:"Mr Kounoupis ,thank you for giving me a headache as to all these US and Greek legal filings but, when someone just gifts to me a property in Greece(just like you advised my parents to do a goniki Parohi to me) do i still have any US  tax reporting obligations? After all there is no income gained yet?" The answere in my view is yes-I think you still have to file IRS Form 3520 with regard to Receipt of Foreign Gifts.  In a future blog entry i will talk about information and documents needed for the US ESTATE TAX FORM WHEN THERE ARE PROBATE PROCEEDINGS AND ASSETS BOTH IN THE US AND  GREECE.

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Hahalis & Kounoupis, P.C. - Greek Law Group
Phone: 610-628-1336
Toll Free: 877-509-4333
Fax: 610-691-8418

U.S. Offices:
20 East Broad Street 
Bethlehem, PA 18018
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New Jersey
1015 New Durham Road
Edison, NJ 08817
(By appointment only)
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Greece Offices:
18 Valaoritou Street
4th Floor
Athens, 10671
(By appointment only)
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10 Ermou Street
Thessaloniki, 54625
(By appointment only)
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Hahalis & Kounoupis, P.C. - Greek Law Group