But with such a large influx of Canadians acquiring rental real estate, they must consider the tax consequences. Canadian investors must make sure that they understand applicable US tax laws and also make sure that they maintain compliance to ensure that they avoid penalties and interest. We are an Arizona CPA firm experienced in dealing with tax issues associated with Canadians who acquire US rental properties. Visit us today at ==> http://www.sundincpa.com
The general tax rule is relatively straightforward. When foreign nonresidents (including Canadians) receive passive rental income from real estate held in the U.S., the Internal Revenue Service (IRS) imposes a 30% tax on the gross rental payment amounts. This tax does not consider any deductions (property management fees, repairs, insurance, etc). However, individuals may elect to have their rental activity taxed as if it was "effectively connected with a U.S. trade or business". This is done by filing an election statement to your US tax return in the year the property is first rented out. If you make this election, you can claim deductions attributable to the real property income and only your net income from real property is taxed.
US tax law can be complex. In addition to filing a federal and state tax return you must also obtain a US tax id # and file all the necessary forms. Make sure you consult with a CPA or other tax professional to ensure that you understand the laws.
At Sundin & Company, PLC we assist Canadian (and other foreign) investors who acquire US rental real estate. We are committed to our clients by demonstrating outstanding tax services while focusing on integrity and confidentiality. Each client is different and we tailor our services accordingly.
Please call us today at 480-361-9400 or visit us at http://www.sundincpa.com.
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This release is solely intended for informational purposes and is not intended to be tax or legal advice. You should contact a CPA or other tax or legal professional to discuss your situation. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. Gilbert, Chandler, Queen Creek Arizona, Canadian.