Structuring Foreign Investment in US Real Estate

Structuring Foreign Investment in US Real Estate PDF

Author: W. Donald Knight, Jr.

Publisher:

Published: 2009-01

Total Pages: 1128

ISBN-13: 9789041128102

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Foreign investors and their American counterparts generally share the goal of minimizing income tax liabilities from their US real estate investments. This rather straightforward aim is complicated by the fact that non-US investors must be concerned not only with income taxes in the United States, but in their home country as well. What's more, the United States has a special income tax regime that's applicable to foreign persons. It's quickly evident to those involved that this is a complex area subject to new developments as the US Congress continually entertains new tax laws (and other statutes with relevant impact like the PATRIOT Act), the Internal Revenue Service promulgates regulations, rulings, announcements and interpretations, and the US courts issue opinions impacting the area. This timely and highly practical resource is designed to explore the considerations that are of unique concern to foreign individuals and entities making US real estate investments. To that end it details the US income, estate and gift tax aspects of inbound investment in US real property and the various structural techniques that may be employed to reduce or eliminate US tax liability under these domestic laws. This work's single-minded focus on real estate, the encyclopedic coverage of relevant tax considerations, and extensive materials on non-tax issues (asset protection, non-tax reporting, limits on foreign ownership of U.S, real estate, etc.) make it an essential resource for non-US investors and their advisers. Structuring Foreign Investment in US Real Estate covers: General rules for taxing inbound investments by non-US persons System for taxing operating income from foreign-owned US real estate Regime for taxing dispositions of US real estate by non-US owners Withholding obligations of purchasers of US real estate from non-US sellers Impact of tax treaty network on US taxation of inbound real estate investment Limitations on non-US ownership of US real estate Reporting obligations for non-US owners of US real estate Planning for acquisitions and dispositions of US real estate by non-US persons Estate and gift tax planning for foreign-owned US real estate This one-volume looseleaf answer questions, such as: How is direct foreign investment in US real estate taxed? How is portfolio investment in US real estate taxed? What are the seller's and buyer's tax obligations when foreign-owned US real estate changes hands? What planning techniques are available to non-US persons for holding and disposing of US real estate? What reporting obligations are associated with foreign ownership of US real estate? Are there limitations on the ability of non-US persons to own US real estate? What impact do tax treaties have on planning for foreign investment in US real estate? What state and local tax issues arise on inbound investment in US real estate? What estate and gift planning should be done for non-US owners of US real estate?

Structuring Investments by Foreign Persons in U.S. Real Estate

Structuring Investments by Foreign Persons in U.S. Real Estate PDF

Author: Alan Appel

Publisher:

Published: 2015

Total Pages: 5

ISBN-13:

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This article describes the basic principles of U.S. federal income tax liability under the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) and the withholding mechanism that ensures collection of the tax. In addition, it sets forth some structuring alternatives to limit a foreign investor's tax exposure with respect to the ownership and subsequent disposition of U.S. real estate.

The US Foreign Investment in Real Property Tax Act

The US Foreign Investment in Real Property Tax Act PDF

Author: Angela W. Yu

Publisher: Kluwer Law International B.V.

Published: 2017-10-24

Total Pages: 384

ISBN-13: 9041184651

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U.S. real estate is enormously attractive to many foreign investors, who are thus ushered into the ambit of the complex U.S. Foreign Investment in Real Property Tax Act (FIRPTA). A full understanding of the associated tax implications on the part of these investors and their advisors is essential if they are to implement the correct structure to maximize their returns, avoid unnecessary withholding, and comply with applicable requirements. This book, the first practical guide to FIRPTA, clearly articulates the operation and transactional implications of FIRPTA and its interaction with various other regimes, sets forth real life situations, and points out potential traps, all in a readily graspable format. Among the tax issues and consequences that directly or indirectly affect foreign investors in U.S. real property interests, the author highlights the following and more: • the real estate investment trust (REIT); • withholding taxes that are jointly and severally liable for buyers and sellers; • treatment of rental, interest, and dividend income; • effect of the branch profits tax; • tax treaty benefits; • exemptions to FIRPTA; • special rules applicable to foreign governmental investors; • tax reporting standards and potential penalties for noncompliance; and • state and local tax issues relating to U.S. real estate investments. Providing a straightforward and accessible guide for navigating the tax issues that confront foreign investors in U.S. real estate, this resource will prove invaluable in identifying and formulating the correct strategies for investors and their advisors with respect to investments in the U.S. real estate market. It is sure to benefit all interested parties for years to come. Angela W. Yu, a tax partner of KPMG’s New York office, has extensive experience providing integrated tax advice to clients on cross-border transactions. She is a frequent speaker on U.S. tax issues, and has addressed many professional organizations.

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