Hi all, I'm an overseas investment virgin and have lots of questions. Now don't jump on me because me I am poring over the threads in the forum and am on a pretty steep learning curve at the moment. The one thing I haven't found discussed as yet is the notion of the double tax whammy – so for the Aussies out there who have invested: if we are paying tax in the states then we are being taxed on foreign investments back here as well where does that leave us? I understand that at the moment the nett returns in the states are very attractive but if the after tax result is equal to or less than if I invest locally that significantly reduces the appeal.
Thoughts?
Elle Dee Esse wrote:Hi all, I'm an overseas investment virgin and have lots of questions. Now don't jump on me because me I am poring over the threads in the forum and am on a pretty steep learning curve at the moment. The one thing I haven't found discussed as yet is the notion of the double tax whammy – so for the Aussies out there who have invested: if we are paying tax in the states then we are being taxed on foreign investments back here as well where does that leave us? I understand that at the moment the nett returns in the states are very attractive but if the after tax result is equal to or less than if I invest locally that significantly reduces the appeal.Thoughts?
Looks like nobody wants to reply !!. I'll give my two cents worth. I have 2 properties in the US..both under the one LLC. How it works out for me initially based on numbers so far…the rent will exceed the claimable expenses by a few thousand dollars but my depreciation claims on the places will cancel that profit out on paper so I will have a taxable loss in the US personally as this would flow through to me from the LLC loss. The US & Australia have a tax treaty in place so you wouldn't get taxed twice…and if I do eventually work into a situation where I do have to pay tax in the US….I claim that as a foreign tax credit on my Aussie tax returns.
What you need to do is not take my advice but speak to a CPA who specialises in this area. James Simango is from US Tax Central based in Brisbane. James is a US CPA & an Aussie CPA so he has the benefit of being able give tax advice from both sides of the ocean. http://ustaxcentral.com/Elle,
Thanks for the valuable information – I've just been trying to figure this out also, and your post has provided a few more answers.
Are you a newcomer to property investing ?I ask as I'm considering purchasing in the US, but there are many area's I can see might trip up the unsuspecting overseas investor – liens, management, legals, taxes, bank accounts etc etc.
Any chance I might be able to PM you at some stage?
Regards
Thanks Speedy, that is exactly the kind of info I need
cheers, Lynne
steevg wrote:Elle,Thanks for the valuable information – I've just been trying to figure this out also, and your post has provided a few more answers.
Are you a newcomer to property investing ?I ask as I'm considering purchasing in the US, but there are many area's I can see might trip up the unsuspecting overseas investor – liens, management, legals, taxes, bank accounts etc etc.
Any chance I might be able to PM you at some stage?
Regards
steevg I think you need to ask speedygonzales – it was he who replied to my question and yes it was very useful information. I think by the sounds of it I am in a very similar place to you and want to make sure I don't trip up somewhere and land myself in some horrible mess.
Steevg & Lynne,
I was fortunate enough to first of all work in the real estate/finance/marketing industry in Phoenix AZ 10 years ago so had some background knowledge to begin with. Then I was able to take 18 months off and do research on the ground in the US and many hours on Skype and google before committing to the first purchase.
It does look like a minefield with so many issues but of you can sort through them it can be worthwhile. You can even get that elusive foreign national financing if you know where to look and simply build the right contacts !!
Biggest hint…..just because someone say's it's so….doesn't mean that it's true !!
Hey Elle and others,
I'd agree that first and foremost, you should speak to a CPA – that's what I do for my tax issues. And when it comes to international tax issues, accountants can be well worth it!
Yes, there is the tax treaty between the US and Australia so you should not be taxed twice!
Hi Speedy, Mattsta & Lynne
I'm currently in the "research" stage of investing in the US (same as Lynne I presume), and am looking at "where" to buy in the first instance – however, in addition to this, I'm trying to find information as to what kind of entity I should be setting up for the best asset protection.
I understand there are several types of "Corporation" which I could use, but also understand these can be expensive. Would you guys recommend a simple LLC to get started, or some other form of entity? What do you use to purchase your investment properties in?
Thanks
steevg
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