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International Real Estate Tax

International Real Estate Tax Issues For Homebuyers and Investors

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Tax attorney Ari Good

Sophisticated property investors from all over the world have discovered Florida real estate.  The Florida real estate market is especially healthy and offers opportunities for home buyers, property investment companies, property investment groups and wealthy individuals looking for low-risk, high-profit investment opportunities.  Investors are equally interested in commercial property in Florida given the region’s growing economy.

Maximizing your real property investment return requires sound real estate investment advice, especially in the area of United States taxes.  The tax laws that apply to foreign real estate investors are very complex and require the supervision of a highly qualified international real estate tax attorney.  The following considerations can make the difference between a successful property investment and a huge tax bill:

How To Structure Your Real Estate Purchase

There are several options for how you structure your property purchase.  These range from simple purchases in your individual name to using Limited Liability Companies United States and foreign holding companies and real estate investment trusts.  Each option has advantages and disadvantages in terms of investor privacy, simplicity and cost.  Some structures are perfectly acceptable for simple purchases of personal residences and smaller investments.  Larger, more sophisticated transactions may demand more advanced planning and organization in order to minimize United States taxes.

Call me: (786) 235-8371

Tax Issues That Relate To The Type of Investment

The taxes you will pay will depend upon several factors:

  • What is your investment goal for your United States property purchase?
  • What type of property you intend to purchase (residential vs commercial, etc)?
  • How long you intend to hold your real property investment?
  • Whether your real estate will generate rental income?

 

The answers to these questions raise a number of tax issues.  Certain property purchases, for one, may qualify for tax incentives.  Second, you will need to understand how to allocate your expenses to the type of income you will generate.  There are different tax rates, for example, that could apply depending on how you report your real property income and elections you may file with the IRS.  Third, you must be aware of the different tax reporting requirements that may apply in order to avoid withholding obligations and delays in your being able to remove or reinvest your real estate profits.  Again, an international real estate tax lawyer is essential to your planning process.

Call me: (786) 235-8371

Tax Issues That Relate To The Investor

Who you are as the purchaser / investor also matters to your United States tax bill:

  • Are you a permanent resident of the United States?  Or do you spend greater than 6 months in the United States in any given year?
  • Do you have a business in the United States, including an office or other “permanent establishment”?
  • Are you re-investing profits that you gained from a prior real estate deal?

 

These questions bear on another set of tax issues.  Without the proper planning you could be subject to withholding on your real estate profits, slowing down your ability to re-invest your money.  You may also wish to file with the IRS to have your real estate income treated as “effectively connected to a United States trade or business”, a complex area of international real estate tax law that can make a huge difference in your tax bill.  In addition to income tax, it is also essential to understand estate taxes and other taxes that may relate to you, your investment partners or family.

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IRS real estate taxes

A skilled international real property tax attorney can help you make intelligent decisions.  To be the best tax attorney possible I bring in a team of sophisticated international accounting professionals who can make sure that you file the right forms in the right way at the right time.  This is a better arrangement than attorneys who work in isolation or without the benefit of multiple accounting, finance and tax disciplines.

Call me: (786) 235-8371

Selling Your Real Property

There is a set of tax rules that will apply when you sell your Florida real property.  Your goal is to minimize your United States taxes, including capital gains tax.  It is also wise to make the best use of any tax advantages you may already have, such as any capital gain carry-forwards you may have from prior years.  An international real property tax attorney can assist you in maximizing your return while minimizing your tax obligations.

Call me: (786) 235-8371

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