Foreigner Wants Vacation Home

4 Replies

I have a foreign relative that wants to buy a vacation home in California. They would use it a few months a year and rent it out when not in use. Most likely a cash purchase. What is the best way to go about this?

- should an LLC be set up?
- what strategy has tax advantages?
- any seasoning needed on the money?


Bob Couture, Real Estate Agent in MA (#9534609)

If cash deal, more than likely will not matter if your relative is US citizen or not.  

Tax to ask a CPA.

LLC used if they want to protect their personal assets from business assets. Yes, you can buy the property in a LLC.

I live in San Diego and might have something your relative might be interested in?

@Bob Couture  If they're paying all cash, then there's really nothing special about the deal that would need to happen (no seasoning). Foreign transactions happen all of the time.

If they're financing, then whatever money they'll be pulling out of pocket just needs to be here in the states beforehand.

I'd suggest chatting with a CPA re: the LLC and tax advantages, but I will say that having an LLC has an expense associated with it so you'll want to make sure the advantages really do outweigh the cost of setting it up (~$700 /yr) plus the additional tax return.

If you need help finding a property, that is what we do. Connect with me and we'll get the ball rolling.

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