Gross rental income is generally subject to a 30% withholding tax unless a waiver form is provided to the payor or agency managing the property. With the waiver form in place, you have effectively told the IRS that the gross income will be treated as ECI and you then must file a tax return to be taxed at tax rates afforded to the entity (individual, corporation) owning or having the beneficial interest in the property.

Excellent response Larry.

I would add that rentals often generate losses. These losses are often non-deductible. And the non-deductible loss can not be tracked unless the return is filed. The important point to this comment is that when the property is sold, the losses are freed up and can be used against the gain on the sale.

So file a US return....

Chuck Heyde, CPA, CGMA
www.GEMMS.us

If your condo rental is for a period less than 6 months, then you would also be liable for sales tax on the rental income even if you don't make a profit.