Rental income from US property and capital gains tax

[surfergirl]

Hi there. My husband and I (we are Irish residents) are thinking of buying an apartment or condo in Florida as a buy to let investment. A few questions we are not sure about which we hope someone here can help with:
Q1) Do we have to pay tax to the Irish tax office on the rental income? If so at what rate?
Q2) Do we have to pay tax to the US tax office on the rental income? If so at what rate?
Q3) If we sell the apartment in a few years, do we pay capital gains tax in Ireland or the US or both, and what rate do we have to pay?
Many thanks in advance....

 

[asdfg]

Q1) Do we have to pay tax to the Irish tax office on the rental income? If so at what rate?

Yes: You pay tax on the profit from rental income after deducting certain expenses as though the property was in Ireland. It goes under the heading of foreign tax in your annual returns. Info on what is allowed is [broken link removed]
You may also have to pay tax in the US - Rules on what is allowable may be different. You pay your taxes due in US and assuming it is allowed under the Double Taxation Agreement you get a credit from the Irish Revenue for the tax paid in US.
You pay the tax due at your marginal rate. The profit is added to your income and taxed in the normal way.
On the irish side any losses can be carried forward until a profit is made.

Q2) Do we have to pay tax to the US tax office on the rental income? If so at what rate?

I would think so. Don't know the rate or how it is calculated

Q3) If we sell the apartment in a few years, do we pay capital gains tax in Ireland or the US or both, and what rate do we have to pay?

CGT is payable in Ireland on your world wide gains at 20% less allowable deductions. This would include property in the US
I don't know of the US situation and assuming the double tax agreement allows it, any tax paid on the gain in the US can be credited against your tax due in Ireland

 

[bsloe]

surfergirl

I would recommend reading this post http://www.askaboutmoney.com/showthread.php?t=25488
before investing in florida. To be honest, you will not need to worry about paying tax as the rental income you get will not cover your mortgage repayments

1. tax is dedcuted by the mgmt co and they will make the tax returns on your behalk
2. as before, cant remember the rate, think the rate is 12% for each rental. then at the end of the yr you compute your total rentals and offset the usual expenses and you pay tax on the profit. I think this rate is 20%. I have not made a return yet so I dont know
3. AFAIK when you sell the condo, the goverment withholds a percentage - say 10% until all your tax affairs are in order then they release the balance. There is a double taxation agreement between ireland and florida so any tax paid there is taken into consideration here ie you dont have to pay tax any any profits twice