There are many foreigners who own property in the US. The current property law in the US does not tax foreigners who acquire property in the US. However, foreign investors are expected to fill in survey documents that are filled by all foreign investors. The information that is provided in the survey depends on the aggregate property that an individual owns in the US real property market.
Taxation on source income is determined by the nature of the income, al income that is received from the owners of real property is considered to be income to the US, this does is not affected by the aspect of the property being individually or corporate owned. Any gains that are acquired from the sale of real property by a foreign business person are considered as income to the US. In the disposal of real property by a foreign investor, 10% of the amount generated is held by the transferee, this amount is not the total tax obligation, it is just considered to be advanced payment. Income tax return forms have to be filled by the foreign property holder to determine the total taxable amount. When foreign investors give out his/her property as a gift, the withholding amount is not considered. The foreign property holder is subject to the US gift tax which has to be played during property transfer. Form 709 has to be signed by all the foreign investors who give their property as a gift. Estate tax is taxable to any foreigner or foreign corporation that own property in the US, upon the death of an individual, the real property after death will be determined by the form of ownership that the owner had. If the property is given to a foreign person, the tax does not apply.
Work Cited
www.americanbar.org//real_estate_law_foreign_investment_us_real_pr.
