Law Offices of Grace Anne Glavin, P.A.
(407) 699-1110

1340 Tuskawilla Road Suite 106

1340 Tuskawilla Road
Suite 106
Winter Springs, FL 32708
Phone: (407) 699-1110
Fax: (407) 699-1165

Tax and Real Estate

TAX ASPECTS OF REAL ESTATE INVESTMENT IN FLORIDA

Grace Anne Glavin, Attorney
Grace Anne Glavin, P.A.
1340 Tuskawilla Road
Winter Springs, FL 32708
Telephone: (407) 699-1110
Fax (407) 699-1165
Website: graceglavinlaw.com
Email: grace@graceglavinlaw.com

  1. Types of Real Estate Investment

    1. Leasing – Use of property by contract for a fixed period of time, not full permanent ownership.

    2. Purchase and Sale – Permanent full acquisition of ownership of real property including land and improvements (building and other accoutrements).

  2. Tax Consequences of Leasing for non-U.S. Investor

    1. Positive advantage of leasing is a steadily generated income flow from real property.

    2. Negative factor is tax consequence and lack of appreciation.

    3. Non-U.S. investor pays flat 30% of income as federal income tax, while U.S. investor pays graduated rate of income tax – so some advantage to non-U.S. investor over U.S. investor.

    4. U.S. has income tax dependent upon income bracket.

  3. Purchase and Sale of U.S. Real Estate by a non-U.S. person or company

    1. FIRPTA (Foreign Investor Real Property Tax Act)

      Definitions and Requirements:

      1. Buyer must withhold 10% of amount realized by Seller who is a non-U.S. person.

      2. Buyer or Buyer’s agent must remit 10% to U.S. Internal Revenue Service within 20 days of closing.

      3. Amount realized is sale price plus personal property (appliances) less amount of mortgage liability.

    2. FIRPTA Exemptions

      1. Non-foreign certificate – if person is U.S. citizen or has a U.S. permanent resident card (green card) and is a resident alien.

      2. Residency exemption – property acquired for non-investment purposes, amount realized must be $300,000 or less, must reside at least 50% of days property is in use during the first 2 years after acquisition.

      3. Maximum tax liability – need U.S. taxpayer identification number to file for withholding certificate. Withholding tax cannot exceed Seller’s maximum tax liability.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

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