Taxation points for foreigners investing in U.S. real estate (1)

Taxation points for foreigners investing in U.S. real estate (1) Due to the sharp decline in U.S. real estate prices in recent years, many foreigners like to come to the U.S. to buy houses, mostly for...

Tax benefits for foreigners If you qualify as a "NonResidentAlien" for tax purposes, interest on federal bonds, bank interest, and "Capital Gain" income earned from buying and selling stocks or mutual funds in the United States are completely exempt from any U.S. tax, and banks or stock brokerage firms do not need to withhold the 30% withholding tax. Since foreigners do not have a Social Security card number, they must fill out Form W-8BEN to prove their foreign status when opening an account at a U.S. bank or stock brokerage firm. This W-8BEN form is valid for three years and must be filled out again after three years, otherwise the bank will deduct the prepaid tax. Some parents with foreign status, for convenience, jointly open bank or stock accounts with their children who are already U.S. citizens or residents, not only to let their children take care of their finances, but also to facilitate their children to inherit their inheritance. Tax regulations stipulate that each holder of a joint account must fill out the W-8BEN form. If one of the holders is a U.S. citizen or resident, he cannot fill out the W-8BEN form. As a result, the account becomes owned by an American and loses the benefits of exemption from withholding tax and income tax for foreigners. What other differences do foreigners pay when buying a house? Please stay tuned for the next issue. For more information about real estate, please contact Tinna of Goldtrust Realty (480) 287-0180 E-mail: Goldtrustrealty2010@ gmail.com