The 2017 Tax Act and U.S. Real Estate: The Foreign Investor and Unusually Low Tax Rates

By Richard S. Lehman, Esq. U.S. Tax Attorney, Boca Raton, FL

This article will focus on:

  • investment structures that will be helpful to large, medium, and small investors;
  • the simplicity of the new requirements; and
  • the extraordinary tools available to the foreign investor that can reduce the foreign investor’s tax burden to an even lower rate than those enjoyed by the American taxpayer.

The 2017 tax act not only reduces the tax rate on real estate profits, it decreases the amount of income that will be taxed annually in the early years by decreasing the time in which deductions can be taken in calculating taxable income. The long and the short of this is that with a little tax planning, the foreign investor should be able to earn ordinary annual income from the rental of U.S. real estate at a tax cost of approximately 15% and from the sale of U.S. real estate at a tax cost in the 21% range.

Download the Full 4-page article here reproduced with permission from Tax Management Real Estate Journal.

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