What happens to a nonresident who owns U.S. real estate and — gasp — does not report the rental income on a U.S. tax return? What is the tax risk to that nonresident investor? And how can that investor fix the problem?
In this article I will discuss the following topics:
This week I want to cover a real estate situation, and the perils of being a withholding agent when there is a foreign seller of U.S. real estate.
From time to time I see foreign corporations as direct owners of U.S. real estate. This can work from a U.S. tax point of view (i.e., it can block the application of estate tax on the real estate if the shareholder dies).
But it creates a host of practical problems. And solving those practical problems will sometimes beget more practical problems.
This time I am going to explore the fine points of withholding tax on the sale of U.S.... continue reading
Hello again, and welcome to the Friday Edition. More international tax goodies this Friday and every other Friday.
It’s Phil Hodgen and you signed up for this road trip. (I never add people to the mailing list — I hate getting spam and I will not inflict it on others). If you want to stop getting this, there is an unsubscribe link at the bottom of this email that will do the trick.
This week’s episode is for nonresident investors in U.S. real estate. Specifically, I am going to talk about an expedient method I have used before (and will use again) to get around a banking problem.... continue reading
Nongrantor trusts offer excellent tax performance for nonresident investors in U.S. real estate:
But everything has its price. These excellent tax results come at the expense of:
This episode of the Friday Edition gives you an overview of the benefits and risks. If you want more detail, you might consider an upcoming webcast/phone presentation on the topic.... continue reading
A group of nonresident individuals want to pool their money to buy commercial real estate in the United States.
They are going to buy decent-sized properties — commercial and office properties in the $5 million to $50 million range. This is serious money but not crazy huge.
How should they set this up for optimum U.S. tax results?The Factors to Consider
The factors to consider are: