TaxConnections

Login | TAXPAYERS | TAX PROFESSIONALS-START HERE
Ask Tax Question

May a Foreign Investor invest in a corporation and avoid paying corporate and individual tax on the gain from the sale of U.S. real estate?

Foreign Investors
TaxConnections Members... Answer This Question Want To be One of Our Tax Experts? Register Here

Tax Professional Answers

User Photo
Richard Lehman, JD, LLM
Yes, once a corporation, Foreign or U.S., has sold all of its U.S. real estate holding and paid the single tax at the operating level of the corporation, the corporation may liquidate and distribute its assets to its foreign shareholders free of tax.

Further, a Foreign Investor who wants to use just a U.S. Corporation to own the U.S. real estate investment will receive the same benefit from liquidating that corporation. The “Second Tax” that usually occurs when cash is distributed from a corporation’s profits can be eliminated.

All of this is accomplished by a single exception in the internal revenue code that governs corporations that invest in United States real estate. Once a corporation that invests in U.S. real estate, (whether it’s a foreign corporation or a domestic corporation), pays all of its U.S. taxes on all the real estate that it owns in the United States, it can liquidate and it can distribute all of the cash that it has from the sale of those assets free of tax to the investor.
Leave a Comment 107 weeks ago



Meet Leading Tax Advisors

User Photo John Stancil

Lakeland, Florida, USA

Tax Advisor/CEO

User Photo Peter J. Scalise

New York, New York, USA

Federal Tax Credits & Incentives Practice Leader

User Photo John Dundon, II EA

Denver, Colorado, USA

Tax Director

User Photo Steven Potts JD EA IAR

Fullerton, California, USA

Principal

User Photo Devon McCarthy FCCA, EA

Sanford, Florida, USA

President

User Photo Caran Ebert, CPA

Topanga, California, USA

Tax Advisor

User Photo Randy Tarpey

Tyrone , Pennsylvania, USA

Owner

User Photo William Rogers, CFP, MBA, EA

Rancho Santa Fe, California, USA

CEO/Certified Financial Advisor

User Photo Lisa Nason CPA, MST

Greenville, South Carolina, USA

Managing Shareholder

User Photo NEERAJ BHATIA, CPA

Santa Clara, California, USA

Tax Principal - President

User Photo Bill Robinson, CPA

Chattanooga, Tennessee, USA

Owner

User Photo Hugo Van Zyl

Stellenbosch, South Africa

Exchange Control & Master Tax Practitioner (SA)

User Photo Douglas Stransky

Boston, Massachusetts, USA

Tax Partner, International Tax

User Photo Chad Hatalla

Rheinfelden, Switzerland

Senior Tax Manager

User Photo Larry Stolberg, CPA, CA

Toronto Mississauga Oakville Burlington Hamilton, Canada

Tax Specialist

View/Select our Current List of Tax Topics

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Previous PageNext Page

Contact Us Today