I thought I'd start a new thread on tax, it crops up on a few different threads.

I have a couple of properties in New York State. As I have only owned them part of the year and as I share them with my partner, we have not earnt over $8750 each then we do not need to file a US Federal tax return.

There is also a NYS tax return, again as we have not earnt over $7500 each, we do not need to file a return this year (Year ending December).

Is this correct? Or is there a point in filing ? for example
* as this is the year I purchased the properties are there any purchase specific deductions that I should be making that can then be carried forward to next FY? (as there is for UK property tax)
* If the agent had witheld rent in lieu of an ITIN would I file to reclaim that tax?

Apart from the above question I would be interested to hear from any UK citizen/resident who has filed Tax Returns, got an ITIN or has used an Accountant.

While you will probably not owe taxes, you still need to file with the IRS.

I don't know tax law for the state of NY, but I'd be surprised if they don't want a return filed, even if you don't owe taxes.

Hi there

interesting thread. I just bought an apartment I am going to rent out in Manhattan and live in the UK where I am a citizen. What is the best way to go about things?

CS

Due to the lack of replies compared to the active threads on purchasing, I'd say most people arent "going about things"!!

IRS in London Embassy sent me an email confirming no tax return necessary if earning under the previously stated amounts. But I think I'd rather file and be sure, so I was recommended a US accountant and I think I'm going to use him for the first year (this decembers's tax year end) and then copy his forms in the subsequent years.

Nightmare of translating this to the UK tax form then ensues!

Yes, I suppose in the current market, tax returns may be the furthest thing from people mind. But I'm sure one day it will bite me in the arse, so I also contacted a reputable accountant with lots of experience with Brits. Lets compare notes.
CS

I agree - any stresses peple have today, would be far outweighed by having IRS and the Inland Revenue on their doorstep.It amazes me that some people seem to think they dont have to pay US tax as they're British and then dont have to pay the related UK tax as its property in US. Admittidly alot of agents brochures lead one to believe its all tax free.

I believe my return would be relatively simple, just 2 properties. I keep good records as I have UK properties and do our UK tax returns myself. We also have a rental agent in US, who supplies good records.

I contacted a few Uk accountants with US experience, but not too many were property related and they charged £500 per person for State and federal returns. I contacted a couple of random US ones in NYS, again hard to find one with much property experience or much non resident experience. Estimates of $200-$500 per person.

I then contacted the US accountant that Brennan properties (who I brought off) recommended. It would be him that was doing my return, not an unnamed person in the office and he sounded very confident about the entire process. I'm assuming he has at least some of Brenans clients, so this is familiar terrritory. He estimated it would take 4-6 hours to do my and my partners 2 returns (4 in total) and would cost $5/600 total.

So, I think I'm going to use him. at least for the first year and hopefully be able to do it myself next year.

What did you find?

Well Sunnyshores,

I just closed on my first US investment on Friday (2 days ago), a 1 bedroom flat in the UES of Manhattan, and its currently empty and needs a spot of renovation. So I haven't got tenants yet. My solicitors in NY recommended an accountant with experience, so I have only just contacted him and awaiting a reply, but will keep you posted on what he says. In terms of the buy, all my mates here think I am totally mad to buy in this current market. I actually got interested in buying in Jan/Feb and found the place in May. I could not predict what was going to happen, so I will have to wait and see. I think I got the place for a good price but I really hope NY won't crash. Actually since I plan on keeping it for at least 5 years, all I hope for is I can rent it out continously at a good rate uninterrupted so I can survive this period of time. Hopefully in 5 years the prices will come back up again. If you have any advise for a US novice, I am all ears...and eyes.

best wishes

CS

HI sunnyshores,

I got some excellent advise. Email me on creativeproperty@yahoo.com

cheers

CS

SS, Creative Source: take a minute to reward yourselves with a little inter-Atlantic tax humor.
- Brits are way out in front of Yanks on renewable energy...we all know that.
- The Housing Rescue bill just past earlier this month offers enormous tax relief via energy production tax credits to US residents and foreigners who pay US taxes. How? Removed the cap for solar energy equipment investments! Thanks to some gritty public officials like Barney Frank and the financial services committee seeking to stimulate investment into housing via this very attractive credit for renewables.
- How to take advantage of this superb tax credit vehicle? Not impossible, but not so easy. To take advantage of this tax credit, an investor may shelter dollar-for-dollar any tax liability payable to IRS or state tax dept. on earned income or on capital gains. Resulting tax credit can be taken back five years or forward five years depending on individual taxpayer's liability.
- The Residential tax credits available on the investment of pv on individual dwellings previously were capped at $2,000 but now rising to $17,000.
There is the rub. The Brits were way out in front of us again. Then pols in Washington figured out a rescue package. check it out HR 1424, US Congress passed this bill to save & extend superb solar energy tax credits.