Best structure to bring non-US funds into real-estate investment

Member since 2019 · 4 posts · 1 vote

I have friends and relatives outside of US who wants to invest in real estate in US. I am a US citizen with an excellent credit and already own a home in CA. I have been living here for 15 years.

The plan is to bring about 150-200k fund from outside of US and combine it with my 100k to invest in rental properties.

I am looking for guidance on a structure that is:

- Most tax efficient from capital gains

- Most cost effective to maintain the structure

- Allow me to leverage my personal credit

Any guidance is appreciated.

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Seth Ferguson
Rental Property Investor · Member since 2019 · 407 posts · 267 votes
7y
Their nationality matters due to various tax treaties. Canadians investing in the US usually use a LP structure vs LLC. LLC sets them up for a double tax scenario. An international tax specialist would be able to add more.
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
7y
@Cihan Sahin

I think you also want to factor in the compliance burden for your friends/family that is living abroad.

Rental Income from US Properties can generate ECI / FDAP income based on election. Foreign investors with either ECI / FDAP income may require the application of an TIN and a filing of a US tax return.
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Cihan Sahin
OP
Member since 2019 · 4 posts · 1 vote
7y
@Seth Ferguson Thanks for the pointers. The country does have a treaty agreement with US to prevent double taxation so thats good. Can I leverage my personal credit for an LP?

@Basit Siddiqi yes we took this into consideration already. We would get the TIN and submit tax return on the US based sources.

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