Many foreign individuals invest in U.S. real property without fully comprehending their tax consequences. A foreign individual for U.S. tax purposes is a non-U.S. resident and a non-U.S. citizen. In most cases, with proper tax planning, taxes can be minimized or even avoided. The following questions illustrate tax issues facing foreign individuals acquiring U.S. real estate and are based on a foreign investor ("Investor") who purchases a house in San Francisco, California, for $500,000. Each question has at least one correct answer.
NOTE: The balance of this article has been incorporated into the Tax Prophet's Action Guide entitled, "Foreign Investors: U.S. Income, Gift and Estate-Tax Consequences" described below:Non-U.S. taxpayers investing in the United States encounter a series of complex income, gift and estate-tax rules. In addition, stay in the U.S. too long and you could become subject to U.S. income taxes on your world-wide income! This Action Guide discusses the common tax traps facing non-U.S. taxpayers and how to avoid them. It is a must read for these taxpayers and their advisors.[an error occurred while processing this directive]