Rental property in the US

[Adwas82]

Hi There

I am considering purchasing a property in the US, which would provide me with a certain monthly income. Given that I would need to pay taxes in US on the rental income, would i also be liable for a tax in Ireland on that same income?
I understand that Ireland and US have a double taxing treaty and whilst my initial understanding was that treaty would help to avoid people paying taxes in both countries on the same rental income, now I understand that i would also need to pay some tax on that income in Ireland.

Any comments or thoughts would be appreciated.

Regards

 

[Rory_W]

Some quick thoughts

Irish Revenue have leaflet on taxation of foreign rental income from Irish perspective

Hidden risk is inheritance tax. Spouse to spouse is exempt in Ireland. In US non resident aliens (that's you!) have an exemption threshold of only around $60k so tax payable on balance. Residents have exemption of a lot more that covers most people so foreign investors are penalised

If you buy in U.S. consider a separate will to cover us assets (for ease of administration of your estate)

Consider currency risk of asset and loan

Consider hidden costs arising from not being located in U.S.

Be happy that rent being touted for property is correct

In us you file state and federal tax returns

What alternative investments have you considered as the risk may be less

Good luck and be careful - money is hard earned and easily lost

 

[cremeegg]

Regarding the tax on rental income and the double taxation treaty.

As I understand it, you pay tax in the US on the income under US rules. Then you declare the income for tax purposes in Ireland with the US tax paid as a deduction. The rates used are just for the purposes of the example.

Example


US Tax return

US Income 100
Less allowable costs in US 20
US Taxable profit 80
US Tax at 40 % 32


Irish tax return

Income 100
Costs (not necessarily same as US allowable costs) 22
Ireland taxable profit 78
Tax at 50 % 36
US tax paid 32
Tax due in Ireland 4


Tax payable

US 32
Ireland 4
Total 36

I don't know if where the Irish calculation gives a negative amount, you can get a refund of US tax paid.

 

[Bronte]

Any comments or thoughts would be appreciated.

My advice and you asked for any, is stay away.

- Too far
- Too complicated
- Double taxation
- Exchange rate
- 2 revenues and 2 accountants
- Inheritence problems
- CGT implications
- Nightmare in the making

 

[Bronte]

I was wondering why you would contemplate this and I see you wrote this thread:
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http://www.askaboutmoney.com/threads/property-in-the-us.196700/

Hi there,

I am looking for a bit of guidance in relation to my situation.

• my brother lives in the US and owns a house, which he wants to put under my name.
• I would not live in the property myself, my brother would as he does now.

From the tax liability perspective, would i need to pay inheritance tax given that the property is worth approx 120k USD?

Thanks for advice.
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It's even worse, your story, what on earth is your brother up to and I know this will not end well.