Question
We own a condo and want to buy another one that is now being built. We don’t have enough cash reserve in our US bank so considering cashing out IRA (we are over 72 yr). We become tax paying residents in May.
Will there be any benefit to cash out before becoming residents or does it matter?
Answers
These are the answers of some Facebook group members:
”If you will spend more than 183 days this year in spain then you’re a tax resident for the entire year. you’ll pay taxes on everything since january”
”ask a financial advisor/tax advisor. Really what you are talking about, you need professional advice”
”If you arrive to Spain any time prior to basically July 4, you are a taxable resident for the full 2023 year. This is how people often get in trouble having sold houses prior to coming, but end up taxed on the capital gain as it happened within the fiscal year”
”So you are saying the same thing. Maybe the “nope” comment and “taxable in May” comment threw me. You aren’t counting 183 from November, you count from January 1. So, you could permanently leave Spain June 30 and still not be a taxable resident in Spain”
In conclusion, according to Spainguru Facebook group members, If you spend more than 183 days in Spain within a calendar year, you will be considered a tax resident for the entire year and subject to taxes on your worldwide income. Cashing out your IRA before becoming tax-paying residents in Spain may not affect your tax liability in Spain. However, it’s advisable to consult a financial advisor or tax professional familiar with US and Spanish tax regulations for personalized advice on your specific situation.
