Handling Taxes with International Airbnbs

Handling Taxes with International Airbnbs

Member since 2022 · 1 post · 0 votes

Greetings,


I am an Airbnb host with properties located in Kenya, Africa. Airbnb issued me a 1099-K tax form, indicating I meet the threshold for gross rental proceeds paid by guests. This means I may owe US income tax on those proceeds, even though I am paying the required Kenyan taxes on the same rental income.

I am seeking advice from anyone with experience navigating US tax obligations as an Airbnb host with non-US rental properties. Specifically:

- Are there any exceptions or tax treaties that could eliminate or reduce my US tax burden on foreign rental income that is otherwise taxed locally?

- What is the best way to account for foreign taxes paid when filing my US returns related to this rental income?

- Does anyone have experience working with a cross-border CPA/tax specialist who understands these issues and can advise me on how to manage US tax compliance for my Kenya Airbnb properties?

Any insights or recommendations would be greatly appreciated! Please feel free to reply here or contact me directly if you have expertise with this type of cross-border tax situation.

Thank you for your time.
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  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    2y

    Are you a US Citizen or US resident for tax purposes?

    You are required to report worldwide income.
    You would have been required to report the income even if you did not get a 1099-K from airbnb.

    Depreciation is reported diferently for properties that you own abroad.
    If you have more than $10,000 in US equivalent, you would be required to report the bank account info to the US.
    There is likely a US - Kenya tax treaty that you may need to familiarize yourself with
    You may get a foreign tax credit for taxes paid to Kenya(to avoid double taxation)

  • Accountant · San Diego, CA · Member since 2019 · 1k+ posts · 552 votes
    2y

    @Basit Siddiqi is correct, I would just like to add that these forms are: 

    Form 8938: statement of specified foreign financial assets ( bank accounts) 

    Form 5471: for reporting interest in foreign corporations ( depending on how your holding your airbnb this maybe important) 

    I would highly suggest having an accountant do it for you! 

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