Purchasing Real Estate Abroad: U.S. and Other Country Tax and Information Return Reporting Requirements

There are many reasons U.S. residents purchase real estate abroad. Favorable exchange rates and the ability to rent the property can make real estate abroad a lucrative investment. Taxpayers may want a reasonably priced vacation home at less than the price of U.S. beachfront properties. Many of the benefits available for property purchased in the U.S. extend to foreign property. Mortgage interest, rental property expenses, and the Section 121 exclusion for gains on the sale of personal residences can apply by meeting the same qualifying requirements of U.S. property.

Some countries forbid foreigners from purchasing real estate or purchasing it directly. Many countries require property to be held by a corporation. Property held abroad might be bought through a U.S. LLC, a foreign corporation, a trust, or other entities. These structures can generate additional filing requirements of Forms 1120 or 1065 and Forms 5471 or 8865. Multinational taxpayers and their advisers need to know the nuances of purchasing real estate abroad and the relative tax consequences.

Listen as our panel of international tax specialists discusses the caveats and considerations of purchasing property outside the U.S.

1. Purchasing real estate abroad: an introduction
2. U.S. tax deductions and considerations
3. Holding structures
4. Rental property in foreign countries
5. U.S. information return reporting requirements for foreign real estate
6. Specific countries
   1. Mexico
   2. Panama
   3. Spain
   4. United Kingdom
   5. Other countries

The panel will cover these and other critical issues:

• U.S. tax deductions for foreign property
• How foreign rental property is taxed in the U.S. and abroad
• Appropriate holding entities in specific countries
• When U.S. foreign information return reporting is required for foreign properties

Learning Objectives

After completing this course, you will be able to:

• Determine tax nuances of real estate purchases in particular countries
• Identify U.S. income tax deductions for foreign real estate
• Understand how foreign rental properties are taxed in the U.S.
• Ascertain when Form 5471 is required for real estate purchased abroad

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).