Do I have to pay tax on sale of foreign property?
If your foreign property did not qualify as a primary residence, you will be subject to the standard capital gains tax rates. If the foreign property you sold is regarded by the IRS as an investment property, you will need to pay the standard capital gains tax rate without any deductions.
Do I have to report foreign real estate to IRS?
Foreign real estate is not a specified foreign financial asset required to be reported on Form 8938. For example, a personal residence or a rental property does not have to be reported.
Can IRS put lien on foreign property?
Yes. Regardless of where you live, the IRS can file a lien against your assets regardless if the assets are located in the US or in a foreign country. Just as long as you own the assets, they are subject to levy.
What are the tax implications of foreign property ownership?
The U.S. tax implications for foreign-owned real estate, however, often catch foreign investors by surprise. Non-U.S. citizens or residents have to pay U.S. tax on rental income generated by their U.S. real estate. Furthermore, FIRPTA, a special U.S. tax law, ensures that foreign investors pay income tax when they sell their real estate. Luckily, with proper business structuring, foreign investors can avoid FIRPTA real estate tax and reduce their overall tax burden.
Are foreign real property taxes deductible?
State, local, and foreign real property taxes are also deductible. However, most taxpayers will save more money on foreign income taxes by claiming the foreign tax credit, which is claimed on Form 1116, Foreign Tax Credit.
What are the tax implications of selling a rental property?
The tax implications when selling rental properties are determined by the basis of the rental property. So usually it will be the amount that you paid for the property. Plus, additional expenses that you incurred to make the sale. If there was damage or something happened that decreased value then you can likewise decrease the basis amount.