FEDERAL TAXES ON RENTAL INCOME AND PROFITS
Below are the main tax and compliance requirements flowing from US rental property:
US Income Tax Return
- All US property foreign owners receiving rental income must file a US tax return (1040NR).
- Annual Tax returns for period 1st January to 31st December are due in the following year.
- Deadline is 15th June but free “extension” is available to get more time to prepare returns.
Capital Gains Tax
- Payable on the net gain of your property to the IRS but annual $36,700 exemption.
- Long term rate is 15% but note Short term gain (less than 1 year and 1 day) is a rate of 30%.
Withholding tax on Rental Income
- In the absence of an ITIN or EIN (if a “Corporate” owner”) a withholding of 30% is applied to gross rental income received by a managing rental agent on behalf of a non-resident.
Bureau of Economic Analysis
- Reporting to Bureau of Economic Analysis (BEA) is required every 5 years (next is 2018).
- Covers all foreign investments of more than 10% ownership or voting rights – includes all ownership of real estate, improved and unimproved, other than personal use.
Wills, Trusts & Estate Tax
For general information on US Wills, Trusts and Estate Tax contact Simon Howell who can assist or refer you to our preferred attorneys for more detailed analysis and advice.
US Tax Returns Preparation
Due Diligence and Trading Reviews
US Visa Financial Planning
Howell International Tax welcomes approaches from all types of investors, including those who have tentative plans and want to get the basics fully understood from someone who speaks "their language".
TAX COLLECTOR WEBSITES
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