U.S. Real Estate Has a Different Tax System for Foreign Owners
Foreign investors in U.S. real estate face a filing regime that is different from both domestic real estate taxation and ordinary international reporting. Rental income, withholding, sale-year reporting, ownership structure, and estate tax exposure all need to be reviewed through a nonresident lens from the beginning.
Common support includes:
- Form 1040-NR and state nonresident returns
- ITIN support
- Section 871(d) net election review
- FIRPTA withholding and withholding certificate planning
- Section 1446 withholding for partnerships with foreign partners
- Ownership structure and estate tax review
- LLC setup, renewals, and bookkeeping support
Rental Property, Partnerships, and Sales Each Have Their Own Filing Stack
The three most common situations we handle are foreign-owned rental property, U.S. real estate partnerships with foreign partners, and sales subject to FIRPTA. Each has its own filing and withholding rules, and the return only makes sense when the structure and operational reporting are aligned. The hub below pulls those planning areas together in one place.
What Usually Goes Wrong
Foreign owners are often taxed more harshly than necessary because the structure or election was never handled early. Gross-rent withholding, missed partnership withholding, late ITINs, and FIRPTA overwithholding are common problems. We help get the filing position right and keep the books and reporting clean enough to support it.
Foreign Real Estate Investors We Work With
We work with foreign nationals who own, rent, or are selling U.S. property, foreign investors using U.S. entities or partnerships to hold real estate, and U.S. partnerships with nonresident partners. For domestic real estate matters such as REPS, short-term rentals, domestic partnerships, cost segregation, and 1031 exchanges, see the real estate page under Business Tax.