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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Tuesday, December 19, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

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

$197.00
CPE
ALL

This course will discuss the considerations and caveats of U.S. residents owning foreign rental property. Our seasoned panel of international tax experts will explore U.S. and foreign holding structures, residential and nonresidential rentals, and properly reporting rental income and expenses with a focus on reducing a taxpayer's overall tax burden.

Faculty

C. Edward Kennedy
Managing Director
C Edward Kennedy Jr, PC

Mr. Kennedy has more than 42 years of experience dealing with a variety of international tax matters, specializing in tax consulting services to a wide variety of clients ranging from closely held companies to multi-national businesses. His expertise includes domestic and foreign income and social security tax planning, tax compliance for individuals and corporations, tax treatment of incentive compensation plans, international assignment program administration, and international assignment policy design. Mr. Kennedy has also served as the U.S. practice leader for international social security matters for a Big 4 accounting firm. He is a frequent speaker in the areas of international tax compliance and reporting obligations U.S. information reporting requirements for foreign assets and foreign entities, U.S. tax implications of foreign pension and social security plans, and U.S. income and social tax treaty planning. Mr. Kennedy is a member of the Texas Bar and is licensed as a certified accountant in Georgia and Texas. He has a B.A. from Furman University and a J.D. from Vanderbilt University School of Law.

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Patrick J. McCormick
Partner
Rimon, P.C.

Mr. McCormick specializes in the areas of international taxation and multinational trusts and estates. He has published assorted national articles and given innumerous national and local presentations on assorted areas of international tax. He is licensed to practice in the State of New Jersey and the Commonwealth of Pennsylvania.

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Description

Many Americans work or live outside the U.S. and purchase vacation homes and residential or commercial rental property while abroad. The property's use, its ownership structure, the owner's filing status, and foreign tax credits all affect the owner's tax obligation.

Personal use of rental property evokes different tax rules than properties operated exclusively for business. Complicating the tax determination are the U.S. vacation home rules. Renting the property for more or less than 14 days and the percentage the property is used personally affect the related expenses' deductibility.

For all rental properties, tax advisers must consider the host country's tax implications and those of the U.S. The rental and sale gain or loss must be properly reported in both countries, often resulting in double taxation. International tax advisers must understand the relief provided under U.S. income tax treaties and foreign tax credits to mitigate this result. Equally important is properly reporting losses in years leading up to the disposition to preserve these deductions.

Although the 2017 tax reform eliminated the deduction for foreign real estate taxes, primary residences located overseas can qualify for the Section 121 exclusion of gains up to $250,000 if single and $500,000 if married by meeting the two out of five-year residency test. Understanding the deductions available and reporting requirements for foreign-owned real estate is critical for tax professionals working with international taxpayers.

Listen as our panel of international tax experts explains the U.S. income tax and other reporting obligations, key considerations when purchasing property abroad, and tips to minimize double and overall taxation in both countries.

Outline

  1. Ownership structures
    1. U.S.
    2. Foreign
  2. Other considerations of owning foreign property
  3. Types of property
    1. Residential
    2. Commercial
    3. Vacation homes
  4. Rental income
  5. Sales
  6. Double taxation relief
    1. Tax treaties
    2. Foreign tax credits
  7. Foreign currency conversion
  8. Other reporting requirements

Benefits

The panel will review these and other critical issues:

  • How is foreign currency converted to U.S. dollars when reporting income and expenses?
  • What are the income tax issues related to selling foreign-owned property?
  • What rental expenses are deductible to lower a taxpayer's U.S. income tax obligation?
  • Using U.S. and typical foreign entities for acquiring and holding foreign real property
  • What are the U.S. reporting obligations for foreign-owned real estate?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Choose the best entity for holding foreign real property
  • Determine what rental expenses are deductible to lower a taxpayer's U.S. income tax obligations
  • Ascertain that tax treaty provisions and foreign tax credits are utilized to avoid double taxation
  • Differentiate between various types of property and the tax consequences related to each type of property
  • Establish the tax treatment of rental income
  • Verify that Form 8858 is correctly filled out and filed

  • 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).