Take good care of your
foreign buyers. As real-estate agents, we have a fiduciary responsibility to
inform our international clientele of the US tax implications when buying or
selling real estate here in Malibu.
Keep your clients informed about
the FIRPTA (Foreign Investment in
Real Property Taxes Act) rules, which require the buyer to withhold 10% of the
gross proceeds when the property is sold.
If the property is rented out, the rental income will be subject to
Federal income tax. The gross rent will be taxed at 30%, without any
deductions. Also important not to forget the state tax position if the property
is rented out or when it is sold.
Always recommend your clients
to talk to their tax advisors before purchasing or selling.
John Snyder, Realtor at Prudential Malibu Realty 310-459-8163
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