r2i forum

Hello ...

I have a condo that i would like to rent out for at least a few years as the difference is way too much for me to digest.

No GC yet.


I have talked to a few property management companies and worked out the #'s...make more sense that way.

a.) Now i want to know the Tax concerns that i must be worried about? Should is go for a S-corp?

b.) Has anyone (non-GC) taken the route. ..or do you knwo anyone who has done this....

please advice.... bit of a hurry


walking out is not an option...as i find it unethical. ;-(

Usually any gains you get can be written off against depreciation and maintenance charges. You should be ok.

Hi,

I don't think you need s corp for putting your property on rent.
It is just your investment income. You may just want to verify if you can qualify to 'actively management of property' . Honestly, I don't think you can get that answer in normal tax professionals. Indian Tax experts may help you.
At the max, if you don't actively manage (although you do it in real) , you won't get to deduct passive losses (i.e if rental income is less than interest+depreciation+expenses(commissions,repairs etc). Those passive losses would acculate to write it off against any profit while selling your property (just my understanding..you need to confirm).

If you put it on rent :
- Make sure that you get a good Tenant. One bad tenant is enough to put you in to losses.Review credit reports and make sure lease terms are good. Try to hold to 'No pets'. If allow pets, be very specific with rules..etc
-agent help may be needed. If you do it your self..take care of how to handle discrimination issues...
-Check if you can get positive cash flow or atleast break even and hope that property value bleeding stops some where..

Taking loss is one thing..but keeping it empty waiting for buyer hurts more..(especially if you have to move out to india or other state)..
Americal Dream could start as sweet dream and can turn to Nightmare ..anytime..after all it's dream... : -(

thanks
kumar

A. No need for S-Corp, the prop management can deposit the check in your acct.
You can deduct depreciation, maintenance, prop taxes, prop manager fees from the rent to pay taxes.
However I believe any depreciation you claim is deducted from the cost price when you sell the house and go to pay taxes if applicable. BTW this was told to me, so not 100% sure.

B. Check Indian wealth tax laws, not sure if Indian citizens can hold foreign properties. I read it long time back, but then laws have changed since then and a major overhaul is coming anyway.
I know some one who have done this(non GC), but they have gone to Canada. No issues there. US dont care as long as you pay taxes.

Would you mind sharing how much the prop agent plans to charge and how they would send the money to you?

> The prop mana. company will charge me 4.5% per month of the rental amount..

> When i sell it... 5-6 yrs from now... i will worry abt repatriations...;) too far to consider now..

thanks for the tip.. will talk to some CA in desh and see..

VS007;312693A. No need for S-Corp, the prop management can deposit the check in your acct.
You can deduct depreciation, maintenance, prop taxes, prop manager fees from the rent to pay taxes.
However I believe any depreciation you claim is deducted from the cost price when you sell the house and go to pay taxes if applicable. BTW this was told to me, so not 100% sure.

B. Check Indian wealth tax laws, not sure if Indian citizens can hold foreign properties. I read it long time back, but then laws have changed since then and a major overhaul is coming anyway.
I know some one who have done this(non GC), but they have gone to Canada. No issues there. US dont care as long as you pay taxes.

Would you mind sharing how much the prop agent plans to charge and how they would send the money to you?