FIRPTA, Foreign Investment in Real Property Tax Act
Just like the branch profits tax, this law was introduced in 1986 to reduce the tax disparity between foreign corporations conducting business through a US branch and a foreign corporation conducing such business through a domestic subsidiary.
Nonresident investment in U.S. real estate
U.S. real estate can be a great investment for qualifying nonresidents. The market is extremely large, fairly liquid, and offers many different opportunities: everything from industrial warehouses to office towers to residential real estate, large and small. There are almost no legal barriers to investment. Nonresidents and non-citizens can own U.S. real estate without restriction.
Aside from financial returns, additional reasons to invest in U.S. real estate include family wealth planning, political insurance, and more. A well-considered purchase will yield good investment returns. A well-considered purchase combined with tax planning will yield great returns. Our tax law firm has the ability to provide you, your family, and friends residing outside the United States with consultation, planning and realization of these benefits. These services include, but are not limited to the creation of entities best suited for you, as well as how to meet all the required U.S. government reporting and maximize profit. Our founding partner, Steve Moskowitz, is a practicing tax attorney and former CPA and Professor of Law, Tax, and Accounting. He encourages foreign real estate investors to take advantage of the safe, convenient, and reliable U.S. real estate market and the U.S. tax laws that greatly encourage foreign investment.
Case examples *:
Instead of a Hong Kong resident investing directly into real estate located in the United States (which a family member may live in (or be rented to a stranger) or be it a larger commercial investment), we may advise setting up a corporation in a tax friendly jurisdiction (such as Hungry or Poland) to eliminate the U.S. tax. Best of all, everything is legal and in compliance with multi-national tax treaties and compliance initiatives.
Another potential way to benefit is by having the overseas investor lend money to a U.S. LLC that is created to acquire real estate. This allows an individual to legally avoid paying tax on any distribution to the foreign investor, including interest and most importantly, appreciation, on the real estate, whether it is sold or not. It is important to note however that not all countries provide these benefits and tax law is complicated and always changing. As such, it is extremely important that you or your family members consult with an experienced tax attorney.
Ultimately, the secret to maximizing profits and minimizing taxes is to plan and buy correctly. Depending on what we recommend for your particular circumstances, we can utilize U.S. and non-U.S. trusts, corporations, partnerships, debt, and other methods to achieve the results you desire. Moreover, in the event you have gotten yourself into a less than ideal real estate investment, we may be able to re-structure the real estate investment, when possible, and revitalize the investment.
Tax attorneys - Put your real estate investment plan into action
As international tax attorneys, we know how to handle the taxes imposed on nonresident investors. We provide financial projections thru the use of our in-house CPA’s and facilitate transactions through various outside service providers such appraisers, escrow and title companies, etc. We realize that the whole investment needs to make sense for you. Contact Moskowitz LLP and see what our tax attorneys can do for you to structure your real estate investment or evaluate your current investments.
*The results portrayed in the cases mentioned on this site are dependent on the facts of that particular case, and results may differ if based on different facts. The case study and/or success stories shared herein are for informational purposes only. It is not intended to and does not constitute legal advice. For more information please call 1∙888∙829-3325 or (415) 394-7200 or complete our consultation request form.