Problem: Rene is a French national who owns a famous vineyard in Bordeaux. Many years ago, he purchased land in the Willamette Valley for $2 million in the hope that he could develop a vineyard in the U.S. Rene is now 75 and wants to sell the Willamette Valley vineyard. He has been offered a price of $15 million.
Rene talks with his French tax advisor who indicated that under the tax treaty between France and the Unites State that capital gains are only subject to tax in France since Rene is a resident of France. Thus, Rene's French tax adviser told him that there would be no U.S tax on the sale of the Willamette Valley Vineyard.
To be on the safe side, Rene's French tax adviser calls you to confirm that the sale would not be subject to tax in the U.S. What do you tell Ren's French tax adviser?