Many foreign buyers are unaware of the relatively complex United States tax issues associated with owning and selling United States real estate, and don’t realize the importance of properly structuring the acquisition of a new home or commercial property in the United States. The United States estate tax, income tax and branch profits tax all come into play in determining the best structure for the investment, along with the home country tax issues.
Failure to properly address these issues can have disastrous results. The foreign buyer should consult a qualified United States tax adviser to assist with these issues before the property is acquired. It is generally advisable to provide, in the purchase and sale contract, that the contract can be assigned to a company owned by the purchaser, and to allow sufficient time prior to closing for the tax issues to be properly addressed.