General Rule. In general, income from real property located in the United States that is owned by a nonresident alien is taxed at a 30% (or lower treaty) rate if it is not effectively connected with a U.S. trade or business.
Are foreign real estate taxes deductible IRS?
You can't deduct these assessments because the homeowners' association, rather than a state or local government, imposes them. Foreign taxes you paid on real estate. You can't deduct foreign taxes you paid on real estate.
How is foreign rental income taxed in the US?
For the most part, foreign rental property is treated the same as a domestic rental property. This means that as an expat property owner, you will generally report your foreign property rental income and expenses just like you would with a US rental property.
Is there capital gains tax on foreign real estate sales?
Technically, all capital gains made by a US citizen are taxable. This is true regardless of whether you are selling US property or foreign property. For example, if you sold a rental property in Florida and received a capital gain, that gain is taxable. The same would be true if you sold a home in Italy.
How do foreigners avoid US estate tax?
Foreign investors are often advised to transfer their ownership interest in their US Corporation to a non-US holding entity to eliminate the US estate tax exposure.
How is foreign property taxed in the US?
If you sell your foreign home, the tax treatment is similar to selling a home in the U.S. If you lived in and owned the property for at least two of the last five years, it qualifies as your primary residence. You you can exclude up to $250,000 of capital gains (or up to $500,000 for married taxpayers) from the sale.