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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3274
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I heard that if a US non-resident sell a house in US with a real estat

Customer Question

I heard that if a US non-resident sell a house in US with a real estate capital gain, the depreciation of the house claimed in previous ECI(effectively connected income) filing will be subject to a 25% tax? If that's the case, is it better to file ECI without claiming house depreciation?
Submitted: 2 years ago.
Category: Tax
Expert:  Barbara replied 2 years ago.
Welcome to Just Answer. My name is ***** ***** it will be my pleasure to assist you with your tax question today.
If a U.S. non-resident disposes of real property situated in the U.S., the non-resident is subject to a non-resident withholding tax of 10% of the gross sales price.
http://www.irs.gov/Businesses/Withholding-of-Tax-on-Dispositions-of-U.S.-Real-Property-Interests
Tax at a 30% (or lower treaty) rate applies to certain items of income or gains from U.S. sources but only if the items are not effectively connected (ECI) with your U.S. trade or business.
http://www.irs.gov/publications/p519/ch04.html#en_US_2014_publink1000222345
Please let me know if you require further information or clarification.
Thank you and best regards,
Barb
Customer: replied 2 years ago.
My question seems to be totally ignored since I am talking about non-resident house rental income treated as ECI. The 30% has nothing to do with this by my question. The answer didn't solve my question at all.
Expert:  Barbara replied 2 years ago.
I apologize if you believe your question seems to be totally ignored, but your question referenced the sale of a U.S. property.
Please clarify what you are referring to--income from sale or income from rental income treated as ECI or both.
Best regards,
Barb

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