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The short answer
If you are a US citizen or resident, a sale of land in Nigeria is a capital transaction on your US return, reported on Form 8949 and Schedule D. Your gain or loss is worked out in US dollars: the purchase price converted at the rate when you bought, and the sale price at the rate when you sold, so a large naira gain can be a small dollar gain or even a dollar loss.
Land is a capital asset
The IRS says almost everything you own for personal or investment purposes is a capital asset (Topic 409, reviewed September 2026). A plot in Lekki, Lugbe or Owerri bought as an investment is one. When you sell it, the difference between the amount you receive and your adjusted basis is a capital gain or loss. Basis is generally what you paid; land received as a gift or an inheritance has its own basis rules, which the IRS covers in Publication 551.
There is no US-Nigeria income tax treaty, so these domestic US rules apply in full, and the sale is reportable whether the money stays in Nigeria or comes to the US.
The exchange-rate effect
All amounts on a US return must be in dollars. The IRS says to use the exchange rate prevailing when an item is received or paid, and it has no official rate of its own. For property, that means converting the purchase price and any improvements at the rates on the dates you paid them, and the sale price at the rate on the date of sale. Taxes for Expats notes that annual average rates are acceptable for recurring items like rent, but not for a cost basis. Because the naira has weakened a great deal against the dollar, this conversion often changes the result completely. See which naira rate to use.
Example 1: naira gain, dollar loss
Example only. The exchange rates are invented for the arithmetic and are not historical rates. Ifeoma, a US citizen in Maryland, bought a plot in 2015 for ₦10,000,000 when the example rate was ₦200 to US$1. She sells it in 2026 for ₦60,000,000, paying ₦3,000,000 in agent and legal costs, at an example rate of ₦1,500 to US$1.
| Item | Naira | US$ |
|---|---|---|
| Sale price | 60,000,000 | 40,000 |
| Less selling costs | (3,000,000) | (2,000) |
| Amount realised | 57,000,000 | 38,000 |
| Basis (2015 rate) | (10,000,000) | (50,000) |
| Result | Gain 47,000,000 | Loss (12,000) |
In naira she made ₦47,000,000. In dollars she has a US$12,000 capital loss. Because the land was an investment, not personal-use property, the loss is a capital loss: Topic 409 allows up to US$3,000 a year (US$1,500 if married filing separately) against other income, with the rest carried forward. A loss on personal-use property, such as your own home, is not deductible.
Example 2: a recent purchase
Example only. Chidi bought a plot in 2024 for ₦20,000,000 and sells it in 2026 for ₦45,000,000, with the example rate at ₦1,500 to US$1 on both dates. His basis is US$13,333.33 and the sale price US$30,000, a gain of US$16,666.67. He held it more than one year, so it is long-term.
Long-term or short-term, and the rates
Land held more than one year gives a long-term gain or loss; one year or less is short-term, and net short-term gain is taxed as ordinary income. For 2025, Topic 409 gives long-term rates of 0% up to taxable income of US$48,350 for a single filer (US$96,700 married filing jointly), 15% above that up to US$533,400 single (US$600,050 joint), and 20% beyond. The page did not show 2026 thresholds when we checked; use the current Schedule D instructions. Large gains may also bring the net investment income tax, which the IRS covers in Topic 559.
How to report it
- Enter the sale on Form 8949: description, dates acquired and sold, proceeds, basis, and gain or loss, all in dollars.
- Carry the totals to Schedule D of Form 1040.
- Keep the purchase receipt or deed of assignment, survey, any C of O or governor's consent papers, and records of fees paid when you bought and sold.
- Keep the exchange-rate source for each date.
- If Nigerian tax was paid on the gain, consider the foreign tax credit (see below).
Nigerian tax on the same sale
Nigeria taxes gains on assets located there. Under the Nigeria Tax Act 2025, individuals' gains are taxed at personal income tax rates rather than the old flat 10% (PwC, May 2026). That is covered in Nigerian capital gains tax on property sold from abroad. Nigerian tax paid can count toward the US foreign tax credit, but the credit is limited to the US tax on the foreign income: in Example 1 there is no US tax on the sale, so a Nigerian tax bill would not be offset that year. The IRS allows unused credit to be carried back one year and forward ten.
Where Pryme fits
Sale proceeds are usually paid in naira. A Pryme account opened from the US can receive them on naira account details, and you decide later whether to swap some into dollars, seeing the rate first. A dated statement of the receipt also helps document the sale date for Form 8949.
Questions people ask
Do I pay US tax if I sell land in Nigeria and keep the money there?
If you are a US citizen or resident, the sale goes on your US return wherever the proceeds are kept.
Which exchange rate do I use for the purchase price?
The rate on the date you paid, not today's rate or an annual average. The sale price uses the rate on the date of sale.
Can I deduct a loss caused by the naira falling?
If the land was an investment, a dollar loss is a capital loss, deductible up to US$3,000 a year against other income with the rest carried forward. Losses on personal-use property are not deductible.
Which forms do I use?
Form 8949, with totals carried to Schedule D of Form 1040.
Sources
- IRS Topic no. 409, Capital gains and losses (reviewed 24 Sep 2026) · accessed Oct 2026
- IRS: Foreign currency and currency exchange rates (reviewed 22 May 2026) · accessed Oct 2026
- Taxes for Expats: foreign rental properties (updated 29 Apr 2026) · accessed Oct 2026
- IRS: United States income tax treaties A to Z (reviewed 3 Jan 2026) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, significant developments (reviewed 29 May 2026) · accessed Oct 2026
- IRS: Foreign tax credit, how to figure the credit (reviewed 9 Jul 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.