US Property - do you need to file a US tax return

Hello all,

I am considering investing in some US property.

If you own property in US and receive rental income from same do you need to file a US tax return in the US?

Any advice would be appreciated.

Thank you.

yes you do and you will need a us accountant as it is a different system to ireland and they allow things not allowed in ireland. cost per year is around $450.

You also have sales tax,tourist development taxes and property taxes (which can be very high depending on where you purchase)

Other costs all alot higher than ireland include:

tv
broadband
gas
electricity
pest control
annual termite inspection
water charges
waste charges
sewer use charges (yes your sewer is metered)
pool cleaning (if applicable)
air con filters
house cleaning on departures
management fees
Association fees (like management company charges in ireland)
rental comission
general maintenance
business licences
alarm monitoring
etc etc the list is endless

kkelliher said:

yes you do and you will need a us accountant as it is a different system to ireland and they allow things not allowed in ireland. cost per year is around $450.

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A number of Irish accountants do US tax returns. (not me though).

They may well do but for anywhere near the cost?

Irish accountants just send your figures to a USA tax accountant, gets the completed returns back, adds a whopping fee and charges you far more than what the US accountant would charge you.
(maybe not with all Irish accountants but certainly from my own and other investors experience. I switched to a USA accountant -who happens to be Irish.)

Of course you still have to submit figures to Irish Revenue and,as kkelliher points out, the calculations can be based on different criteria from USA tax returns.

You must file a tax return in the U.S., there are benefits due to the double taxation treaty that exists between Ireland and the U.S. so you will not pay twice.

In my case I pay my Accounant closer to $1000 rather than $450 but I have a few properties, the tax paid is minimal, there is so much that can validly be deducted.

It is my understanding that if no income taxes are paid that 10% of the price achieved at disposal is held back for the IRS, I got that information from my Accountant.

KKelliher lists many items in his post, as the O.P. already owns U.S. property they will be familiar with the overhead costs of which from my point of view as an investor are as follows.

*Payment of property taxes
*Payment of Association monthly fees
*Accountant charges - deductable.
*Landlord Insurance - about $160 annually
*Management charges and usually one months leasing commissions

And it is still worth doing.

US Revenue always retain a percent of the sales money if the seller is overseas and then releases it once it is satisfied that any tax due is paid. Takes a few months.
This applies whether one is letting a property or not.