Best ways to bring capital from overseas back to US

[Chris Laird]

I’m in the process of selling a property in Australia, where due to it being my primary residence previously there is no capital gains tax due (similar to the exception here). I’m a dual Aus and US citizen. I’m now living in the US again and the plan is to bring the proceeds to the US to reinvest in real estate.

Are there legal ways to avoid/minimize paying taxes on the proceeds as they are transferred to the US?

[Court Haas]

The transfer of the money back to the US is irrelevant to whether you owe tax in the US or Australia.   As you are a dual citizen, you'll need to include the sale on both your AU and US tax returns and follow the relevant rules by country on whether you get a main residence exemption.  The transfer of the proceeds is secondary and not a taxable event.

From a US tax perspective in order to be exempt from capital gains, you need to have owned and lived in the residence for 2 of the past 5 years prior to sale. 

From an Australian perspective, Jordan is right, you need to determine if you are an Australian Resident for tax purposes.  If you have been living back in the US for the entire fiscal year, you may not be an AU Resident for tax purposes anymore.  The AU government is about to change the rules on being able to claim the main residence exemption if you are considered a foreign resident.  The new rules which are expected to go into effect on 1 July 2019, would not allow you to claim the main residence exemption if  you sell the property while considered a foreign resident.  Have a read the following links:

https://www.ato.gov.au/general/capital-gains-tax/your-home-and-other-real-estate/your-main-residence/

https://www.ato.gov.au/General/Capital-gains-tax/International-issues/Foreign-residents-and-main-residence-exemption/

In terms of transferring money back to the US, I've used OFX.com.au for many years, but Transferwise noted previously is also good.  Whatever you do, don't use your AU bank as their rates are usually up to 200bps worse than third party providers like OFX or Transferwise.

As most have noted, speak to an accountant in each country to get formal advice.