Frequently Asked Questions

Yes, the United States is one of the few countries that taxes based on citizenship. The only exception is if your income is under the filing threshold for your filing status.

Yes, there is the foreign earned income exclusion, foreign housing exclusion, and foreign tax credit.

When living outside of the US, a certain amount of your income can be tax-exempt by the IRS. For 2022, this amount is $112,000 and will increase every year. To qualify for the FEIE, you must meet the below three requirements. 1 - Your tax home must be in a foreign country. 2 - Your income needs to be earned when located in a foreign country. 3 - Meet one of the following two tests A - Bonafide Resident Test - A US citizen who is a bona fide resident of a foreign country for a period of an entire year B - Physical Presence Test - A US citizen physically present in foreign countries for at least 330 days in a consecutive 12-month period.

The Foreign Housing Exclusion is an addition to the Foreign Earned Income Exclusion. You can claim an exclusion for your foreign housing cost over 16% of the FEIE, with a maximum exclusion of 30% of the FEIE. For 2022, this amount is your housing cost of over $17,920, with a maximum exclusion amount of $15,680

The Foreign Tax Credit ensures you do not pay taxes twice on the same income. Essentially, you can get a tax credit for any taxes you pay to a foreign country.

A section of the tax code says if the average customer stays at a short term rental for 7 days of less, then your short term rental is not a passive rental activity. It is treated like any other business that you materially participate in and you can use the losses to offset W-2 income.

A 1031 excahnge allows a real estate investor to sell a property and use the proceeds to buy another property. The tax advantage with the 1031 exchange is you can defer the capital gains tax for the sale of the property.

Starting in 2017, new rules allowed for 100% bonus depreciation to be written off the same year the expense was incurred. Starting in 2023, this tax rule will be phased out. 2023 will allow for 80% bonus depreciation, with 20% reductions until fully phased out in 2027. That means time is running out for bonus depreciation tax savings.

Yes! Residential properties can be depreciated over 27.5 years and non residential properties can be depreciated over 39 years. This is part of what makes real estate a tax friendly investment.