This question is relating to income tax for property ownership in the USA and what taxes I should pay to th US government (in addition to the property taxes).
As a foreign property investor with several properties in various states what deductions can be made?
Do I have to provide receipts for every single deduction?
Where and when would I lodge the tax return?Furthermore it would be appreciated if any replies to the above query were outlined as if addressing a primary school student. Yes I'm not joking.
Am no expert in this area, however I have properties in US and this info that may be helpful.
Firstly, I had my accountant align my US tax to Aus tax lodgement date just to keep the process clear and simple. I believe tax in US is lodged in December no idea on exact date, sure someone can help you with this one.
Do you have loans set up against your properties? I will be claiming interest on loans that I have set up, however there will be a with holding tax in US of 10% on interest.
I would imagine you can claim anything that is an expense on the purchase of your property including maintenance same an in Australia and depreciation. In addition 1 flight pa and associated expenses. I am in the process of completing my second US tax return so am still working on this. Will post more info soon.
I would be interested if you care to share on accountant you are using for US tax.
Cheers WI
Hi WI,
What sort of entity are you using in the US to hold your properties? LLC? If so I understand you have a choice between lodging a tax return as a company or as an individual, and the benefit of filing as a company is fewer tax returns but there are capital gains benefits if you file as an individual.
I am trying to prepare tax returns at the moment through US Tax Central who are Australian based. I bought a place in Atlanta with a friend so if we file as a partnership we each have to file individual tax returns (state and federal) and then the partnership has to as well. 6 tax returns for one year at a cost of about $1800 all up, before we actually pay tax. Just trying to work out if this is worth it for the sake of the capital gains tax concessions. Any wisdom appreciated.
Cheers.
Jclimie, your accountant would be preparing a partnership return and then two individual tax returns when there are two owners of an LLC, on both the State and Federal level.
The information from the partnership return feeds right into each individual return – I don't think it is really that hard for the accountant to do the returns.
Have you tried to negotiate a more favourable fee for the six tax returns?
I personally believe that its worthwhile putting one's resources towards obtaining US tax advice.
All the best.
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