Some of the most dangerously unknown tax traps exist in the realm of foreign investment in U.S. real property. With the high demand for U.S. real estate by foreign buyers, the opportunity to capitalize on great rebounding market has never been greater. While such investments are expected to yield great return in both in the short and long-term horizon, properly structuring the investment is crucial.
Limited Liability. The investment must be held in a limited liability form where the investor is protected from outside creditors.
Management. The investment must account for the appropriate management structure to assure efficiencies and competency in the day-to-day operation of the investment.
Tax Considerations. An appropriate entity structure must be set up in order to prevent estate tax inclusion of the investment upon the foreign investor’s death. Many foreign investors ignore this concern to their severe detriment. Furthermore, withholding of income tax both on the ongoing income generated by the investment as well as gains from the ultimate sale of the investment must be properly addressed.
At Dorot Law, P.A., we assist our foreign investors clients in assuring their protection to the highest degree available in order to maximize their investment and avoid unnecessary tax implications. Once the appropriate structure is in place, our clients are able to increase their investment at minimal additional set-up cost. Whether you intend on investing in a small apartment on South Beach, an entire building on Brickell, or a shopping center in Doral, Dorot Law, P.A. will vigorously and competently represent you.
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In the News and Relevant Publications
February 28, 2011. Getting Personal Canada: Canadians Can’t Escape US Estate Taxes (WSJ). Canadians can’t escape the U.S. taxman’s reach–even in death. Even if you aren’t a U.S. citizen or resident and you don’t own U.S. real estate, you might still have to pay U.S. estate tax if you die owning U.S. assets. Known as “U.S.-situs assets”, they include: real estate; shares in publicly traded or closely held U.S. companies; personal property located in the U.S., including art, automobiles, yachts, clothing, furniture, gold and jewellery; cash in a U.S. safety deposit box; deposits with U.S. brokerage firms; stock options in U.S. corporations; and some life insurance policies. The estate must file…
February 14, 2011. From wills for Florida condos to working up north (Montreal Gazette). Taxes in northern Quebec and Florida were on readers’ minds this week. Here’s what they wanted to know. Q: “My wife and I own a condo in Florida and we are preparing our last will and testament. Is there wording we require in our Quebec will to ensure the condo goes to the other, without probate, when either of us dies? Will there be taxes owed then or when the condo is subsequently passed on to our children?”…
January 31, 2011. Finding the Right Vehicle for US Investing (MoneyShow.com). Invest in the USA with your TFSA? US dividend stocks offer some interesting possibilities for income-seeking investors, and now’s an opportune time to buy them because the Canadian dollar is at parity with the US buck. But what’s the right investing vehicle for the likes of AT&T, Merck, Johnson & Johnson, Intel, and McDonald’s, all of which yield more than 3.3%?…
January 26, 2011. Leviev buys AFI Development shares (Globes). The shares belong to AFI Development CEO Alexander Khaldey. Africa-Israel Investments Ltd. (TASE:AFIL), controlled by chairman Lev Leviev, has agreed to buy 9.7% of the shares in its Russian development arm, AFI Development plc (LSE:AFID) for $129 million. Leviev is buying the entire stake in AFI Development from the subsidiary’s CEO Alexander Khaldey, who owns the shares through his company, Nirro Group. He will continue in his post…
January 18, 2011. When Withholding Taxes are Applicable During a Timeshare Sale (The Wall Street Journal). The disposition of a deeded timeshare interest in the United States is considered the real estate transfer of a real property interest, and as such may be subject to both state and federal income tax withholding requirements. A disposition generally includes, but is not limited to, a sale or exchange, liquidation, redemption, gift, transfers, etc…
January 8, 2011. Miami Beach Luxury Condo Market is Heating Up, Says Realtor Dario Stoka (San Francisco Cronicle). Now that Miami real estate has rebounded and “value” is the operative word on everyone’s list, it is the perfect time to find a condo on The Beach. Miami Beach Real Estate Consultant Dario Stoka explains why it time to buy…
January 6, 2011. Israel firm buys 21 units at Miami’s Marquis Residences (Miami Herald). An Israel-based company has bought 21 condominium units at the Marquis Residences in downtown Miami, paying a total of $8.6 million…
December 24, 2010. Florida prices at ‘best ever’ level. Low prices in the Florida real estate market have made the state an increasingly popular choice for European investors, it has been reported. As house prices in Florida hit bargain levels, properties in Miami’s trendy South Beach and cheaper areas in the north have become particularly popular. Investors have been keen to take advantage of the Miami prices, which according to Standard & Poor’s Case-Shiller 20-City Home Price index have fallen by 47% since their peak in 2006…
December 23, 2010. Downtown Miami condo sales jump 62%. (Miami Today). Condo sales in Miami’s urban core soared 62% in the first nine months of this year compared to the same period in 2009, a realty analyst says. Competitive prices in recently-built condo towers and high interest from foreign buyers have been a win-win combination for a market considered ground zero of South Florida’s condo boom…
December 22, 2010. Condo sales heat up as deals resume (Miami Herald). South Florida’s housing market gained momentum in November as banks lifted their bans on foreclosure sales and condo sales soared, according to figures released Wednesday by the Miami Association of Realtors. Sales of existing condos in Miami-Dade County topped 1,000 for the first time since 2006, as buyers such as Brandon Revell scooped up low-priced units…
December 20, 2010. Investors make a bet on downtown Miami, buying tower for $106 million. (Miami Herald). Miami’s brightest building is helping beat back some of the gloom hanging over the city’s glutted office market, as Chicago investors make a big bet on downtown’s return to boom times…
December 14, 2010. Foreigners flock to Florida real estate bargains. MIAMI — Foreign tourists who for years have crowded Florida’s shopping malls to buy clothes and electronics, are now flocking to real estate offices to snatch up apartments and homes at bargain-basement prices. The investors, mainly from Europe and Latin America, are jostling over apartments in Miami’s trendy South Beach neighborhood selling for 70,000-100,000 dollars, and in less exclusive areas to the north where they start at around 50,000…
December 6, 2010. Real estate seen as secure income. Global capital flows into real estate have rebounded since the end of 2008 as investors seek fresh sources of income in a sustained low interest rate environment, says Anne Breen, head of real estate research and strategy at Standard Life Investments…
November 15, 2010. Israelis 2nd in US real estate investment. International report indicates Israeli firms invested $441 million in US property in January-July 2010, second only to Canadian investors. Israelis are the biggest foreign investors in the United States after the Canadians, an international report by RCA real estate assessments suggests. According to the report, Israelis invested $441 million in US real estate between January and July 2010. The Canadians, by comparison, invested some $ 1.67 billion…
July 28, 2010. Foreign Direct Investment in the United States: An Economic Analysis. Foreign direct investment in the United States declined sharply after 2000, when a record $300 billion was invested in U.S. businesses and real estate. [Note: The United States define foreign direct investment as the ownership or control, directly or indirectly, by one foreign person (individual, branch, partnership, association, government, etc.) of 10% or more of the voting securities of an incorporated U.S. business enterprise or an equivalent interest in an unincorporated U.S. business enterprise. 15 CFR § 806.15 (a)(1).] In 2008, according to Department of Commerce data, foreigners invested $325 billion. Foreign direct investments are highly sought after by many state and local governments that are struggling to create additional jobs in their localities. While some in Congress encourage such investment to offset the perceived negative economic effects of U.S. firms investing abroad, others are concerned about foreign acquisitions of U.S. firms that are considered essential to U.S. national and economic security.
September 15, 2010. Foreign Investors Hover Over U.S. Real Estate, But Few Swoop In. While Investment Activity is Up Sharply Over 2009′s Historic Lows, Sovereign Wealth Funds and Other International Investors Find Few Buying Opportunities for High-Quality U.S. Property…
