Accepted Answer

Hello soheil,

Even though you are not a US citizen or a resident of the US, if you own rental property in this country, then you are subject to tax on your net rental income, and you must file a tax return each year with the Internal Revenue Service.

There are some cases when it is required that 30% tax be withheld from your rental payments, but this would not apply in your particular case.

When you file your tax return here in the US, you will claim your rental fees as income, but then you will also be allowed to deduct any expenses you had in connection with that rental property. This would include the cost of any mortgage interest you are paying, property taxes, property management fees, and repairs. You are also allowed to claim depreciation on your property over a 27.5 year period of time. Travel that you make to the US to inspect your rental property may also be fully or partially deductible. By the time you add up all of your expenses, it is possible you will end up with little or no net rental income, and will not owe tax. But you do still need to file the annual tax return.

Tax returns are due by April 15th of each year to cover the preceeding calendar year. Tax returns filed by a foreign person cannot be filed electronically. You must have your return prepared and then mailed to the IRS.

You should seek the assistance of someone who is familiar with US tax laws and who is familiar with filing nonresident returns to help you with your filing.

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Thank you.

Expert:	Merlo
Pos. Feedback:	99.8 %
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Answered:	5/7/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad