How is Eduardo taxed on the sale for US tax purposes

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Question - Eduardo Ballios, a citizen and resident of Singapore, purchased real property in Nevada for $2 million. In 2021, Eduardo sells the building for $3.1 million, but has expenses related to the sale of $100,000, for a total net gain of $1 million. How is Eduardo taxed on the sale for U.S. tax purposes?

a) The $1 million of gain is subject to U.S. net income tax because the gain is from a trade or business in the U.S.

b) The $1 million of gain is subject to gross U.S. withholding tax at 30% because the gain is from a U.S. real property

c) No U.S. tax because paying U.S. tax is voluntary

d) U.S. tax because the gain is not U.S. source FDAP income

Reference no: EM133091360

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