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I'm an Australian citizen and passport holder. I have a work…

I'm an Australian citizen...

I'm an Australian citizen and passport holder. I have a work and residency permit for the USA for 3 years. I live here and have a SSN. I also have 4 properties in Australia that operate at a loss. Can I offset this loss in Australia against my declared income in the USA?

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

I'm a non tax resident of Australia

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Answered in 1 hour by:
3/8/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,719
Experience: Taxes, Immigration, Labor Relations
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In general - yes - but there are some important circumstances you will need to consider.

1.

You are an US resident alien for income tax purposes - because you are living here - so you are required to report ALL your worldwide income regardless if derived from the US or from abroad.

Correspondingly - you will report loses generated in Australia.

2.

I assume these are rental properties - correct?

So you will need to use schedule E to report your rental activities - and calculate deductions based on US tax law - so while you still may realize a loss - the amount might be different that you have on your Australian tax return.

3.

Another issue that rental activity is specifically classified as passive activity under US tax .

In general passive loss may be ONLY used to offset other passive income.

Do you have any other passive income ?

If know - there is a special provision for taxpayers who materially participate in that rental activity - whose with modified adjusted gross income (MAGI) less than $100,000 can claim up to $25,000 in rental losses.

the $25,000 limit is reduced for those with MAGI above that limit and completely eliminated at $150,000 income level.

4.

Unused (disallowed) rental losses are not "lost" - but are carried forward and may be used in following years - and are fully deductible in the year the rental property is sold.

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Lev
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