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My question is regarding US tax law for overseas property. I…

Hello, My question is regarding US...
Hello,
My question is regarding US tax law for overseas property.
I am a US citizen. My husband is a UK citizen. I have no legal status in the UK. He has no legal status in the US. We live in the UAE. I am an at-home mum and I have no income. Because I have no income, I do not file taxes. I do file an FBAR each year to report our joint checking account here in the Emirates.
My husband and I are in the process of purchasing a house in the UK. We plan to rent out the property and expect the rent to cover the bulk of the mortgage payments. My name is ***** ***** mortgage. However, the rental income and the mortgage payments will go through a UK bank account that has only my husband's name on it. (I am not allowed to have my name on it because I am not resident in the UK.)
Does the purchase of the house and its subsequent rental have any implications for me in the US? If at some point in the future the rental income is more than the mortgage payments, does that make a difference? If at some point my name is ***** ***** account that handles the rent and mortgage, does that make a difference?
Thanks for your help.
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Answered in 3 minutes by:
3/10/2018
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,191
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

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If the property is not owned by you then you are not taxed in the US on the rental and you need not report that either. You would need to be an owner of the property and on the deed for you to be required to report that on a US tax return.

Please let me know if you need more information.
If not then please scroll up to see the STARS to rate so I am credited.

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Customer reply replied 4 months ago
Hi Robin. I am an owner of the property. My name as well as my husband's is on the deed. What implications does this have for my taxes in the US?

You would be required to report half on your US return. This is true even if no tax is due. If you dispose of this property you will also need to report that for US tax purposes.

If any tax is every paid in the UK (by you) you can always claim a credit on your US return.

Rental property is required ot be reported even if no tax is owed. File the 1040 form and Schedule E

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Customer reply replied 4 months ago
Okay, so I will report that I 50% own a rental property in the UK. Do I need to report the rental income as well, even though that money never touches a bank with my name on it?

Yes, as a joint owner you are to report the half of all.

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Unlike UK where a spouse can transfer the income to the other that is not so for US tax. There is no transfer of income and the half of the property you own is reported including the income.

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Customer reply replied 4 months ago
Okay. I report half of all rental income. I do this using 1040 schedule E. I file this and the FBAR. That's it, right?

That is correct. The FBAR is just for your accounts and not the rental property but continue with that as you have been and file the 1040 form with the Schdule E to report rental.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,191
Experience: 15years with H & R Block. Divisional leader, Instructor
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Customer reply replied 4 months ago
Got it. Thanks so much for clarifying!

You are most welcome.
A positive 5 star rating is appreciated so I am credited for assisting.

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