Foreign Real Estate Investors

International Real Estate has Tax and Reporting Gotchas like FIRPTA

Foreign real estate investors are subject to FIRPTA – Foreign Investment in Real Property Tax Act – that has reporting and withholding challenges. that sometimes trip up new investors whose CPA is not familiar with international real estate regulations. This over 40 year old statute has mandatory withholding that should It is common to now do business across the globe. Generally FIRPTA applies on the sale of real estate property, but can apply to other scenarios. You can often recover your FIRPTA withholding via a Federal tax return, and the penalties for non compliance on behalf of foreign real estate investors can be unreasonably large.

Foreign Real Estate Investor – Tax and FIRPTA CPA Services

FIRPTA Compliance and Foreign Real Estate Investor Compliance

Foreign real estate investors are critical to the Miami Real Estate market. The Florida economy depends on tourism and international business. As a firm in the Miami and South Florida market, we routinely help foreign real estate investors evaluate their deals, manage compliance, and minimize their tax burden. Many CPAs not familiar with this world assume that participation in a 1031 Exchange relieves you of this requirement, but it generally does not. While there are some ways to avoid it, the conditions on the deal are rarely met, so it is important to plan to FIRPTA compliance before your sale occurs. If you have already made the sale and a 1031 Exchange and need to recover your FIRPTA withholding, a knowledgable international business CPA can help you comply and recover your money.

With the burgeoning world of short term rentals, foreign real estate investors have tremendous business opportunities to generate superior cash returns. This will require additional compliance in the United States, managing areas of bed taxes, sales tax, and income tax for this operating business. General real estate investment strategies of bonus depreciation and cost segregation still apply, but the additional layer of non-resident tax compliance also applies. Just like you need a knowledgable real estate agent and other professionals to manage your deals, a knowledgable foreign real estate investor CPA can help avoid pitfalls.

Foreign real estate investors can have access to the American market and its incredible opportunities. Miami and South Florida have many real estate investors in the market. Compliance with regulator rules and reporting requirements like FIRPTA can avoid headaches and financial problems as you generate your business returns.

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By |July 6th, 2022|#FinanceFriday|

Hi, welcome to #FinanceFriday. My name is Bette Hochberger, CPA, CGMA, and on today's episode, we have the lovely Cheryl Euart with Community Lending Powered by Lower, LLC. NMLS ID #1668094 joining us to discuss how you, as an entrepreneur, can qualify for a home loan without a w-2. This week was a bit different because I am on my way to New Jersey to visit my family. One of the perks of working remotely and in a cloud-based business is that I have an excellent work-life balance.

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