Home ownership in China and living in the USA

[Hobber]

Hi All,

 

Quick question. My fiancee is a home owner in China. The home is paid off and in her name. She plans on letting her parents continue to live in the house when she comes to the States (hopefully soon; still waiting for SAO check to be completed). After we marry, how will this property be viewed by the USA? Will we need to pay any type of tax on the property? We will not be making any income or anything off the property.

 

Thanks,

 

Matt and Lili

[dnoblett]

The property is not in the USA, so no paid to the US or States.

[A Mafan]

Unless you have a security clearance.

Then you need to let your security officer know about the situation. Just be honest and it is no problem.

[Hobber]

Unless you have a security clearance.

Then you need to let your security officer know about the situation. Just be honest and it is no problem.

 

Who? What? Security clearance..........???

[A Mafan]

Unless you have a security clearance.

Then you need to let your security officer know about the situation. Just be honest and it is no problem.

 

Who? What? Security clearance..........???

There are a few around that have security clearances, and should consider the issue of their wife's property in China.

[Beachey]

The property is not in the USA, so no paid to the US or States.

 

Is this correct? My understanding is as a US permanent resident (or US citizen), worldwide income is subject to US taxation. So real estate in China would be treated the same as real estate in the US.

 

In Hobber's case (not being a tax professional) there is likely no tax liability. However, if the property generated income it would need to be reported on your tax return.

[dnoblett]

The property is not in the USA, so no paid to the US or States.

 

Is this correct? My understanding is as a US permanent resident (or US citizen), worldwide income is subject to US taxation. So real estate in China would be treated the same as real estate in the US.

 

In Hobber's case (not being a tax professional) there is likely no tax liability. However, if the property generated income it would need to be reported on your tax return.

 

Correct, if it were rented out, and were getting a positive gain from renting, then yep would have to pay tax on the income.

[Randy W]

The property is not in the USA, so no paid to the US or States.

 

Is this correct? My understanding is as a US permanent resident (or US citizen), worldwide income is subject to US taxation. So real estate in China would be treated the same as real estate in the US.

 

In Hobber's case (not being a tax professional) there is likely no tax liability. However, if the property generated income it would need to be reported on your tax return.

 

 

Correct - but not stated correctly. There is no taxation authority in the US that would tax you on the property (property taxes).

 

But yes, her worldwide income is required to be reported on her income tax return. But it may be excludable using the Foreign Income Exclusion - maybe not, however, if she doesn't qualify, e.g. because of residency.

Edited November 10, 2011 by Randy W (see edit history)

[Beachey]

The property is not in the USA, so no paid to the US or States.

 

Is this correct? My understanding is as a US permanent resident (or US citizen), worldwide income is subject to US taxation. So real estate in China would be treated the same as real estate in the US.

 

In Hobber's case (not being a tax professional) there is likely no tax liability. However, if the property generated income it would need to be reported on your tax return.

 

 

Correct - but not stated correctly. There is no taxation authority in the US that would tax you on the property (property taxes).

 

But yes, her worldwide income is required to be reported on her income tax return. But it may be excludable using the Foreign Income Exclusion - maybe not, however, if she doesn't qualify, e.g. because of residency.

 

 

Well real estate is to my knowledge is taxed in the the US exclusively at a local level. So whether a property is in China or in the US, there is no difference. The only taxation is local. I also believe that a few jurisdictions in China have started to assess a property tax. To the extent you can write off your property tax in the US, I would think you could write off the Chinese property tax as well. Whether it would be worth it due to the increased chance of an audit is a separate question.

[credzba]

Well real estate is to my knowledge is taxed in the the US exclusively at a local level. So whether a property is in China or in the US, there is no difference. The only taxation is local. I also believe that a few jurisdictions in China have started to assess a property tax. To the extent you can write off your property tax in the US, I would think you could write off the Chinese property tax as well. Whether it would be worth it due to the increased chance of an audit is a separate question.

 

We own some apartments in China, and rent them out.

I have filed the income on my taxes for 3 years, and the expenses (which more than offset the income).

I use turbo tax, and do my best to report everything properly. So far no issues, or audit, so I don't think it raises any special flags.

 

I also noted though that depreciation etc. of those foreign assets doesn't seem to affect my taxes like local property did in the past (don't have any rentals in usa right now).''

 

 

At any rate, I am no accountant, just a citizen trying to follow the tax rules best I can, and so far I have seen neither benefit, nor disadvantage to reporting rental income from China.