Finance, Forex and Investments

Transferring money from INR to USD?

I have an NRE a/c and NRO a/c in India. All the money in that is tax paid USD I sent to India. I was saving for my kids. Now I need to bring it back to US. Indian laws are fine, they are ready to transfer back. But what are the tax implications in the US? Do I have to pay tax on the money again? What if I convert back the currency rate is different and say I am profiting from the conversion? Is there any limit to how much I can bring etc. Please help ASAP, but only if you know the answer for sure.

Public Comments

1. If you want to know ¨for sure¨ then go pay an attorney, no that wont work either. Welcome to the real world where s**t happens but occasionally someone will try to help. You can transfer your money without Federal Income Tax implications. If you have trouble, tell them your Uncle Eric said so. Aside from wire fees and conversion costs of the currency fluctuation, no problem, no hidden costs. Changing currency one time for your personal use is not a taxable event UNLESS you were holding it for that purpose. You weren´t were you? If currency to currency exchanges required an accounting, every time an American crossed into Canada or Mexico and made a purchase, like about a billion times a year, a taxable event would occur. Go in Peace and bring your Dollars home where they belong. Good Luck.
2. Basic principle is that you have to pay tax only in one country. So if you paid taxes in India, you can get a deduction in the US. However, you need to disclose WORLDWIDE income in the US. There are no tax implications of bringing money back to the US and it will not be considered as Income. If you make a profit due to currency fluctuation, that is a profit and needs to be disclosed. One more thing - you cannot transfer money to the US from your NRO account. You will have to get cash, exchange it to dollars on the open market and bring it in physically. All the best.