Foreign Investor Issues

Summary

This practice note discusses foreign investment in U.S. real estate and the various tax implications associated with such an investment. The tax issues that foreign investors face depend on the way the income is sourced in the U.S. This practice note provides an overview of the tax rules that will apply based upon the characterization of the U.S. sourced income, including, tax rules related to fixed or determinable annual or periodical income, income "effectively connected" to a U.S. trade or business, the branch profit tax, and the Foreign Investment in Real Property Tax Act.