Paying tax on American Property.

Archnic

I read your post with interest and thought id have a go at some of your queries.  I have recently purchased some units in Jamestown, NY and am an acct in oz. 

1. I believe you would be required to complete a US tax return regardless of whether you are holding the property through an LLC, C Corp or your own name.  Of course, you SHOULD be able to claim any tax back on your return in oz via foreign tax credits.  Dont know which form though sorry.  I havent held my property for the whole tax year yet. 

2.  You can claim any deductions reasonably incurred in earning your assessable income.  Anything incurred in relation to your property in the US is deductible, as long as its not a capital improvement (which gets added to your cost base).  Even travel expenses if the sole purpose is to check on the properties.  Plenty of info on the ato site re this.   You can negatively gear the investment on your oz tax return.  I am not sure if neg gearing is allowed in the US though?  Something i need to research.

3. You should perhaps look at getting a US acct the first time you do your US taxes.  Just to ensure that everything gets setup correctly.  I cant help with Syracuse, but Al Suchar in Jamestown NY came highly recommended to me.  I havent used his services yet.

PM if youd like to chat.   It would be good to exchange some info with another oz investor exploring the ny market.

Cheers
Josh

If you find the accountant/CPA route a little expensive (like I did) you can always get TurboTax. I use TurboTax Home and Business and the question and answer format is really easy to use. It completes all the relevant forms for you along with any state returns. The only manual process is that it doesn't automatically produce a 1040NR form, but it is very easy to take the information off the 1040 it produces and put it on the 1040NR.

I visited US last year, found a decent property manager.  Bought several cheap houses that have been rehabbed under her supervision, tenants found before work completed.  However, the tax side is a nightmare.  I was advised to put houses in an LLC, did that, now I am informed that, I will be taxed in Aust, as well as US because they consider I am living here and managing the Company from here.  Plenty of accountants in US  do not understand tax treaty with Aus and why should they.   Likewise there are a few US trained accountants here that know both sets of rules.  Some also do US tax returns from here.
How do I find one that knows both countries' tax rules and can give good plain advice, without me worrying that I will get a $50K tax bill 3 years later, all because sometime didn't tick the right box now.

I am not sure if I have posted this in the right section, I have just joined up.    Can anyone can help point me in the right direction?????????

Hi guys,

Our plan is to source an Australian accountant with knowledge on how to do US tax. A friend of a friend is doing it this way although his accountant is quite exy… $900 although we would rather have an Auusie do our accounting, simply for peace of mind, because the Oz taxation system is so complicated.

A quick search of websites like the Institute of Chartered Accountants in Australia – http://www.charteredaccountants.com.au – comes up with plenty of Aussie accountants with international experience and although it involves a fair bit of ringing around will be worth it. From my research and anecdotal evidence from people I know who also investing in the US property market, the statement that you need an accountant in the US is simply not true. Hope this helps!

Cheers

Hi Archanic,

I just joined today, I am in the process of setting up a business called invest USA, we are advising Aussi investors on property investment opportunities that currently exist in the USA. Concentrating on 3 area’s in the USA. I have 2 accountants that are based in Sydney that are both experienced in Australian and USA tax laws. If you would like there details I would be happy to email them to you

Hi TassieJH

I have opened up my profile to receive emails. If not you can email me [email protected]

I can be contacted there.

Jeff2tract