Tax Requirements for Foreign Property Owners

All tax matters various by each individual’s portfolio, please consult your tax adviser for your specific situation. The following is a general rule of thumb.

For out-of-State property owners, IRS require quarterly FTB tax payment of 7% withholding -along with 592-V and 592, Annually owner is also responsible to fill-out 592-B.

For Foreign owners, IRS require form W-8ECI on file for each foreign owner if not, owners are required to send in 30% of gross rents as withholding. Annually Manage should issue form 1042-S in place of a 1099.

When property is sold, the buyer must deduct and withhold a tax on the total amount realized by the foreign person on the disposition. The rate of withholding generally is 15%.

All tax matters various by each individual’s portfolio, please consult your tax adviser for your specific situation.

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