ECOVIS Americas published an article by International Tax Co-Leader Mark Chaves, about income tax and estate tax considerations for foreign investors making real property investments in the U.S.
By Mark Chaves, Co-Leader, International Tax
In the event that U.S. property will be used personally and is owned by a separate entity, it is important that a lease agreement be executed and that the lease rate consider the fair rental value of the property to avoid any unwanted income or estate tax consequences. Care should be taken to ensure that lease payments are made to the corporation by its shareholders and that property expenses are borne by the corporation itself. These details are often overlooked by purchasers of U.S. property, but should be “top-of-mind” once the property is acquired.