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What are the tax implications if I own a foreign rental property?

In general, the reporting requirements for foreign rental properties are the same as domestic rental properties if owned by a U.S. citizen or green card holder. You must include Schedule E with your tax return and report all rental income received during the year. You can take deductions for many expenses related to the property, such as mortgage interest, repairs, depreciation, insurance, and management or association fees. If you paid foreign taxes on the income generated from your rental property, you may be able to utilize the Foreign Tax Credit. Rental income is generally considered passive income and cannot be excluded under the Foreign Earned Income Exclusion unless you are actively in business as a real estate professional.


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Updated: June 2, 2018

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