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Foreign/Nonresident Property Owner Tax Issues

Foreign/Nonresident Property Owner Tax Issues

Real Property Management of South Orlando recommends Prince & Co. CPA’s LLC dba Lynn CPA Group

Lynn CPA Group is a full-service Certified Public Accounting firm licensed in FL. They offer a broad range of services for our Foreign/Nonresident Clients and for our Domestic Clients. They are affordable, experienced, and friendly.

This page summarizes the tax responsibilities of Foreign/Nonresident rental property owners.  It is not intended to take the place of counsel from a qualified Certified Public Accountant (CPA).  Info provide by Sondra L. Steele with Prince & Co. CPA’s LLC dba Lynn CPA Group.  

Individual Taxpayer Identification Number (ITIN): Each owner listed on the deed needs an ITIN.  It is then used on all subsequent tax filings.  IRS Form W-7 is used to apply for the ITIN and you may complete this form yourself.  Lynn CPA Group was designated by the Internal Revenue Service (IRS) as a Certifying Acceptance Agent.  This means that the IRS entrusted Lynn CPA Group to help individuals complete and file their W7 form accurately.

W8-ECI:  Certificate of Foreign Person’s Claim for Exemption from Withholding of Income:  This form informs your property management company of your exemption from having 30% of your rental income withheld for federal income taxes.  It is the owners’ responsibility to provide the W8-ECI form to the Property Manager.  After you have been assigned an ITIN we will be happy to complete this form for you so that you can forward it to your property manager.

1042-S:  Foreign Person’s U.S. Source Income Subject to Withholding.  Form 1042-S is completed annually by your property manager and sent to both you and the IRS.  It reports the amount of rental income collected on your behalf and any income tax withheld from those funds.

1040NR:  US Tax Return for Nonresident Taxpayers.   This form needs to be filed annually for each nonresident listed on the deed of the rental property.  It reports income and expenses of the rental property for the calendar year.  It is recommended that this form be filed by a CPA with experience in nonresident tax issues.   

8288B:  Application for Withholding Certificate for Dispositions by Foreign Persons of US Real Property Interests.  When you sell your property, the IRS requires that 10% of the sale price be withheld and sent to the US Treasury.  There are several exceptions to this required withholding and most of them require the submission of Form 8288B to justify why these funds should not be withheld.   This form should be prepared by your CPA and should be engaged as soon as you have found a buyer for your home as it will need to be submitted before the closing date.  Be sure to contact you your CPA office for more information if you decide to put your property on the market for sale.

County Tangible Personal Property Tax Return.  (FLORIDA) – This form reports the funishings in your rental home so that a tax may be assessed on those “business assets”.  It is filed in the county where your rental property is located and is due by April 1.  You will need to file the first year and then may be sent a “waiver” for subsequent years if the assets are valued at under $25K.

State Sales and Use Tax and County Tourist Tax. Florida State and County laws require the collection of certain taxes on many types of rental income.  Either you or your property manager can file the returns.

You can contact Sondra L. Steele for more tax info at:

(407) 823-8230

9161 Narcoossee Rd. #202

Orlando, FL  32827

For question about Orlando Property Management call RPM South Orlando at 407-982-2000

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