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 $40,125 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 2023).
- 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 TaxFor 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.
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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".
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Howell International Tax
8701 W. Irlo Bronson Memorial Highway
Suite 100
Kissimmee, FL 34747
8701 W. Irlo Bronson Memorial Highway
Suite 100
Kissimmee, FL 34747
407-245-7600