Why Foreign Nationals Need a Real Estate Appraisal for Tax Purposes:

Foreign nationals owning U.S. real estate face various tax obligations, including estate, capital gains, and gift taxes, as well as general tax reporting requirements. A professional real estate appraisal is crucial for compliance and avoiding penalties. REIS Group Appraisals provides expert valuation services to meet IRS requirements.

1.  U.S. Estate & Gift Taxes
Estate Tax Implications – Foreign nationals receive only a $60,000 U.S. estate tax exemption, with the remainder taxed up to 40%. An appraisal from REIS Group Appraisals establishes fair market value (FMV) for IRS Form 706-NA, ensuring accurate tax reporting and preventing overpayment.

Gift Tax Considerations
Gifting U.S. real estate may trigger up to 40% in gift tax. The IRS requires FMV documentation to assess tax liability. REIS Group Appraisals ensures proper valuation, minimizing risk of disputes or penalties.

2. Capital Gains Tax on U.S. Property Sales
Importance of an Appraisal – When foreign nationals sell U.S. real estate, capital gains tax is calculated based on the difference between the sale price and cost basis. An appraisal helps determine the correct valuation to prevent overpayment or IRS audits.

FIRPTA Withholding Requirements
Under FIRPTA, 15% of the sale price is withheld. However, a properly documented appraisal from REIS Group Appraisals may reduce withholding by proving a lower taxable gain via IRS Form 8288-B.

3. Gift Tax Compliance
A real estate appraisal ensures the accurate FMV is reported on IRS Form 709, confirming tax obligations and preventing disputes. REIS Group Appraisals provides appraisals that withstand IRS scrutiny, protecting clients from potential penalties.

4. Tax Reporting & Compliance
Foreign nationals need appraisals for:
Rental Property Taxes: Establishing depreciation schedules, property tax assessments, and FMV adjustments.
Foreign-Owned Asset Reporting:
Countries like Canada and the UK require citizens to report U.S. real estate holdings. A professional appraisal from REIS Group Appraisals ensures compliance with both U.S. and foreign tax authorities.

Conclusion
Foreign nationals must navigate complex U.S. tax obligations, making professional appraisals essential. REIS Group Appraisals delivers IRS-compliant valuations, helping clients minimize liabilities and avoid disputes. If you own U.S. real estate, an appraisal from REIS Group Appraisals is a crucial step toward protecting your assets and ensuring tax compliance.