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Old 10-22-2014, 09:41 AM
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overseas tax claim

Hi, I have a question regarding income earned from rent of overseas property. I am an overseas tax payer and I would like to purchase a property. the property will be in my name. however since according to US law all properties are shared 50/50 between husband an wife, how should we file this rental income and how much is the exclusion limit which has to bee considered.



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Old 10-24-2014, 02:41 PM
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Originally Posted by ahmedmo View Post
Hi, I have a question regarding income earned from rent of overseas property. I am an overseas tax payer and I would like to purchase a property. the property will be in my name. however since according to US law all properties are shared 50/50 between husband an wife, how should we file this rental income and how much is the exclusion limit which has to bee considered.
“however since according to US law all properties are shared 50/50 between husband an wife,”==========>>it depends; married couples usually own most, if not all, of their valuable property together. If you want to leave everything to your spouse, as many people do, you don't need to worry about what belongs to you and what belongs to your spouse. Generally, in community property states, money earned by either spouse during marriage and all property bought with those earnings are considered community property that is owned equally by husband and wife. Likewise, debts incurred during marriage are generally debts of the couple. At the death of one spouse, his or her half of the community property goes to the surviving spouse unless he or she left a will that directs otherwise.however, married people can still own separate property. For example, property inherited by just one spouse belongs to that spouse alone. A spouse can leave separate property to anyone; it doesn't have to go to the surviving spouse. In common law states, it's usually easy to tell which spouse owns what. If only your name is on the deed, registration document, or other title paper, it's yours. You are free to leave your property to whomever you choose, subject to your spouse's right to claim a certain share after your death. you can register the rental property in either only your or only her name only.
once the property title is in both names, the income/expenses/capital gain are to be split 50/50. The income comes from the ownership of the property, You need to contact an attorney on your issue for more accurate info.



how should we file this rental income and how much is the exclusion limit which has to bee considered.=======>>>>>>>> All US citizens and residents are required to declare their worldwide incomes on their individual income tax returns; This means that both / either of you and your wife should complete Sch E of Form 1040 for the rental property overseas. as mentioned above; aslongas you pay taxes on your rental income to the foreign taxing authorities, you can claim tax credits on your US return;I mean you can either claim a deduction for these taxes or a credit against your U.S. income tax liability. If there is little or no profit from the property, a deduction for the taxes paid may be able to lower your overall U.S. tax more than a credit would. Alternatively, a credit might be more valuable as a carry-over against future gains from the property.



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Old 10-24-2014, 02:42 PM
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Originally Posted by ahmedmo View Post
Hi, I have a question regarding income earned from rent of overseas property. I am an overseas tax payer and I would like to purchase a property. the property will be in my name. however since according to US law all properties are shared 50/50 between husband an wife, how should we file this rental income and how much is the exclusion limit which has to bee considered.
“however since according to US law all properties are shared 50/50 between husband an wife,”===>>it depends; married couples usually own most, if not all, of their valuable property together. If you want to leave everything to your spouse, as many people do, you don't need to worry about what belongs to you and what belongs to your spouse. Generally, in community property states, money earned by either spouse during marriage and all property bought with those earnings are considered community property that is owned equally by husband and wife. Likewise, debts incurred during marriage are generally debts of the couple. At the death of one spouse, his or her half of the community property goes to the surviving spouse unless he or she left a will that directs otherwise.however, married people can still own separate property. For example, property inherited by just one spouse belongs to that spouse alone. A spouse can leave separate property to anyone; it doesn't have to go to the surviving spouse. In common law states, it's usually easy to tell which spouse owns what. If only your name is on the deed, registration document, or other title paper, it's yours. You are free to leave your property to whomever you choose, subject to your spouse's right to claim a certain share after your death. you can register the rental property in either only your or only her name only.
once the property title is in both names, the income/expenses/capital gain are to be split 50/50. The income comes from the ownership of the property, You need to contact an attorney on your issue for more accurate info.



how should we file this rental income and how much is the exclusion limit which has to bee considered.=======>>>>>>>> All US citizens and residents are required to declare their worldwide incomes on their individual income tax returns; This means that both / either of you and your wife should complete Sch E of Form 1040 for the rental property overseas. as mentioned above; aslongas you pay taxes on your rental income to the foreign taxing authorities, you can claim tax credits on your US return;I mean you can either claim a deduction for these taxes or a credit against your U.S. income tax liability. If there is little or no profit from the property, a deduction for the taxes paid may be able to lower your overall U.S. tax more than a credit would. Alternatively, a credit might be more valuable as a carry-over against future gains from the property.



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