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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15732
Experience:  15years with H & R Block. Divisional leader, Instructor
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Is foreigners eligible for real estate tax deduction? Thank

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Is foreigners eligible for real estate tax deduction? Thank you

Robin D :

Hello and thank you for using Just Answer,

Robin D :

When you say the real estate tax deduction what exactly are you referring to? The deduction for the property taxes you pay on property in the US?

Robin D :


Customer: Yes
Customer: Hi
Robin D :

Deductible real estate taxes are generally any state, local, or foreign taxes on real property. They must be charged uniformly against all property in the jurisdiction and must be based on the assessed value.

Robin D :

Now foreigners do you mean resident aliens or Nonresident aliens?

Customer: Non resident aliens
Robin D :

On real estate in US or outside the US?

Customer: On real estate in US
Robin D :

One sec while I confirm, please

Customer: Thank you
Robin D :

If you are using this real property as income production (such as rental) then you are allowed to use the real estate taxes paid as a deduction against the rental income if choose under Internal Revenue Code section 871(d) to treat all income from that property as income effectively connected with a trade or business in the United States.
Nonresident aliens are only taxed on their US source income , so if this is not income producing property and investment property you are holding, no.
You can claim deductions to figure your effectively connected taxable income. You generally cannot claim deductions related to income that is not connected with your U.S. business activities. Except for personal exemptions, and certain itemized deductions, you can claim deductions only to the extent they are connected with your effectively connected income.
You can deduct certain itemized deductions if you receive income effectively connected with your U.S. trade or business. These deductions include state and local income taxes(not property taxes), charitable contributions to U.S. organizations, casualty and theft losses, and miscellaneous deductions. Use Schedule A of Form 1040NR to claim itemized deductions.

Customer: Thank you
Robin D :

You are most welcome

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