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Tax Tips for Nonresident Alien Individuals Investing in U.S. Real Estate

July 16, 2015

The tax treatment of nonresident alien individuals investing in U.S. real estate can be surprising - they should be aware of important considerations.

Investment in U.S. real estate continues to be attractive to nonresident aliens, but planning for the potential U.S. taxation of nonresident alien investors is critical. There are a number of key tax considerations that should be evaluated by a nonresident alien before purchasing an interest in U.S. real estate.

3 Key Taxes, Among Other Considerations

  1. Income Tax – Income earned from ownership of U.S. real property can be taxed in different ways, depending on certain facts and elections of the taxpayer. This can have a significant effect on after tax cash from the investment.
  2. Capital Gains Tax – Sale of the U.S. real property may be subject to a separate capital gains tax.
  3. Estate Tax – Ownership of the U.S. real property may subject the nonresident alien owner’s estate to U.S. estate tax in the event of the death, despite being nonresident.

For more details and insights, read our article, “When a Nonresident Alien Individual Wants to Buy a U.S. Rental Property”.

Questions? Contact any member of our Global Tax Services Practice.

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