The boom in U.S. real estate caused by foreign investors is about to get bigger as a result of greatly reduced U.S. income taxes for nonresident aliens and foreign corporations.
Because of the new 2017 Tax Act, foreign investors could receive a 40% reduction in the U.S. income tax of their gains and income from their real estate investments. For those foreign investors who already were invested in U.S. real estate, their after-tax returns could now be 40% more valuable without their raising a finger. Read More
After a property is purchased, there is generally a time period that a property is held before it is developed. Common expenses that are incurred are property taxes and interest. Other expenses incurred can be classified as an operating expense, added to inventory cost or capitalized for tax purposes.
Property taxes and interest on vacant land are generally capitalized or added to the cost of inventory for real estate. These expenses on vacant land can only be deducted in the same tax year if there is property income received and the corporation is not in the business of development. Read More
The 2017 Tax Year was the “reappraisal” year in Franklin County and several other Ohio counties. Generally, because Tax Year 2011 was the last “reappraisal” year for the Ohio counties listed below, taxpayers may want to review the value that the Auditor assigned to the real estate for Tax Year 2017. Taxpayers may find significant changes to their real property values because the economy has significantly changed since 2011. Read More
County Auditors in Ohio are permitted to collect a fee for the administration related to the transfer of deeds. There are two elements to the “real estate conveyance fee” (which is also commonly referred to as the “real estate transfer tax”). R.C. 319.54 levies a fee that is measured as 10 cents of every 100 dollars of the value of the real property transferred. Counties, under R.C. 322.02, are also given the authority to levy an additional real estate transfer tax of up to 30 cents per one hundred dollars of value (grand total of maximum fee/tax of 40 cents of every 100 dollars of value of real property transferred; or, denoted as a decimal 0.004). Read More
There are various real estate expenditures that are deductible to the corporation and others that are capitalized or allocated to inventory. In this FAQ, we will discuss the real estate expenses that are deductible during the pre-acquisition phase as an operating expense to the corporation in the fiscal year that expenditures were incurred.
There are many “soft” costs in real estate such as representation costs, site investigation costs and financing expenses.
Representation costs are eligible for a deduction for amounts paid in the year. Examples of these costs are rezoning applications, project planning and preliminary design costs. Read More
Italian taxation of foreign investments in Italian real estate is complex.
Transfer taxes charged upon the acquisition of the real estate (alternatively, registration tax or VAT) vary depending on the nature and tax status of the buyer (foreign private individual, foreign company purchasing and owning the real estate directly, or foreign individual or corporate investor purchasing and owning the real estate through an Italian controlled entity), as well as the nature and tax status of the seller (private individual vs. unincorporated business or commercial company registered as a VAT taxpayer).
Currently, a valuable income tax deduction related to real estate is for depreciation; however, the depreciation period for such property is long and land itself isn’t depreciable.
Whether your real estate property is occupied by your business or is being used as a rental, here’s how you can maximize your deductions:
.All Americans are required to file US taxes and report their worldwide income, wherever in the world they live. Thankfully there are a number of IRS exemptions that can be claimed to reduce or eliminate US tax liability for expats, however even if no US tax is owed, expats still have to file an annual federal return.
There are thought to be around 9 million Americans living overseas, many of whom, particularly those who have moved abroad permanently, consider purchasing foreign real estate. Read More
Spring and summer in some areas of the country are prime times to sell a home.
In warmer climates like Texas, Florida, Arizona, Nevada and the Carolinas, the home buying/selling season is less defined. In more temperate climates it rarely matters when you put you home on the market. Read More
In response to a question from Lisa Foster on Part II of the blog, she asked if there was a worksheet to track the cost basis. I have found no universal worksheet that could be used in all circumstances. If you would like me to send you an example of a Cost Tracker, please email me at jim@MarshallPC.com and I will be happy to send you a Cost Tracker Worksheet which will be very helpful. Read More
This is a continuation from a previous post from last week, “Real Estate Professionals For U.S. Federal Income Tax Purposes.”
What many taxpayers have a difficult time understanding is that qualifying as a real estate professional does not guarantee that your rental activities are non-passive. It simply means that your rental activity is not NECESSARILY passive regardless of your level of participation.