Can anyone outline the basic rules for Capital Gains liability for an overeas investor (from Australia) buying and selling real estate in the US (Florida) as a non-resident alien?
I couldn't find a thread dealing with that and I can't understand the information on the IRS website.
Hi Mojorising,
From what I understand it is a sliding scale, the longer you hold onto the property then the less the capital gains tax you will have to pay. I have a US Tax accountant here in Sydney that I use, as my investment strategy is to hold property for positive cash flow my main interest is in that area, however I will be purchasing some property in the future that will be for capital gain.
I also think that capital gains tax is Federal not a state tax issue, therefore it would not matter if you purchased in Florida or Denver.
Have you purchased any property yet or just doing research?
Why Florida?
Jeff
Thanks Jeff,
Would be interested if anybody has kowledge of actual numbers.
Like in Australia the basic rule is that we pay CGT at our marginal rate of income tax on 50% of the profit – for property held more than 12 months.
mojorising wrote:Thanks Jeff,Would be interested if anybody has kowledge of actual numbers.
Like in Australia the basic rule is that we pay CGT at our marginal rate of income tax on 50% of the profit – for property held more than 12 months.
Mojorising,
I have contact with an accountant that I use when purchasing property in the USA, he is based here in Sydney, he did tell me, but as I am holding property for positive cash flow only I didn’t take to much notice. I can find out.
Are you interested in purchasing property in the USA?
Jeff
Thanks Jeff,
I am also in Sydney.
Yes, I am thinking about buying in Miami so I am watching British Buyer's thread with interest.
Mojorising
I am also reading his thoughts and observations, I have steered away from Florida, concentrating on area’s that have the possibility of capital gain and area’s that have only positive cash flow.
I have purchased in NY state for a very good ROI 25%nett for an investment of under 60K.
I did look into Florida when I was there earlier this year I was advised to stay away from condo’s as the HOA fees could eat up any profit and many HOA were going broke and had no money to look after their respective property.
I like to concentrate on single family homes
Jeff
Hi Jeff,
I am very interested in how the taxation situations works as I am in Sydney also.
Does rental income have any effect on Australian taxes you pay?
Are you able to claim any tax deductions in Australia from having an investment property in the US?
How did you structure the purchase with regards to taxation implications? Did you set up a LLC?
Any further clarity regarding the taxation issues would be greatly appreciated as the more research I do the more varied and confusing it seems to become.Many thanks,
Stuart
Stuart,
It can be confusing, from what my accountant has told me, that you can claim deductions in the USA , so when you pay your tx in the USA that is when your accountant claims the deductions
The rental income is taxed in the USA you can earn foreign tax credits because you payed tax in the USA, I have set up a business called investusatoday, we do advise locals on the inns and outs of investing.
My email adress is [email protected]
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