How to report and file RENT Income:
1. The property is a foreign property
2. The owner of the property according the DEED is a person, who we name “OWNER”
3. According to the DEED the property has a user, who we name “USER”, who has the right to use the property for free to the rest of his life.
4. According to the foreign country Law the “USER” is responsible for paying real estate property tax AND only the “USER” has rights to rent the property AND only the “USER” will collect the rent AND only the “USER” is responsible for all taxes of the collected rents.
5. The “OWNER” can not live in the property without permission of the “USER” of the property and the “OWNER” have to pay rent if the “USER” decided to rent part or full property to the “OWNER”. The only “OWNER”’s rights is to sell the property BUT the CONDITION, that “USER” reserve the rights to use the property for free to the rest of his life MUST exist in the new owner DEED and the “OWNER” has to pay Capital gains taxes.
6. According to the foreign country Law there are 4 ways to be terminated the rights of the “USER”
---a/. When the “USER” die.
---b/. When the “USER” sign notarized Statement presented to the judge for WAVER of the rights to be any longer a “USER”.
---c/. If the “USER” use the property in improper way, which damage the property the “OWNER” has right to ask in a court procedure, the judge to remove the “USER” for using any longer the property.
---d/. If the “USER” does not use the property during 5 or more years period, the “OWNER” has right in court procedure to ask the judge to remove the “USER” for using any longer the property.
7. The “USER” cannot transfer his rights of using the property to anybody.
The Questions:
1. If the “USER” and the “OWNER” are US citizen and the “USER” rent this foreign property, does the “OWNER” has to report something to the IRS.
2. Does the “USER” report the rents received and the Expenses on Form 1040 (Schedule E). In the Form 1040 (Schedule E) Instructions is written to report IF you OWN an interest in a real estate property, but the “USER” does not own.
3. How and who will report the DEPRECIATION of the property.
1. The property is a foreign property
2. The owner of the property according the DEED is a person, who we name “OWNER”
3. According to the DEED the property has a user, who we name “USER”, who has the right to use the property for free to the rest of his life.
4. According to the foreign country Law the “USER” is responsible for paying real estate property tax AND only the “USER” has rights to rent the property AND only the “USER” will collect the rent AND only the “USER” is responsible for all taxes of the collected rents.
5. The “OWNER” can not live in the property without permission of the “USER” of the property and the “OWNER” have to pay rent if the “USER” decided to rent part or full property to the “OWNER”. The only “OWNER”’s rights is to sell the property BUT the CONDITION, that “USER” reserve the rights to use the property for free to the rest of his life MUST exist in the new owner DEED and the “OWNER” has to pay Capital gains taxes.
6. According to the foreign country Law there are 4 ways to be terminated the rights of the “USER”
---a/. When the “USER” die.
---b/. When the “USER” sign notarized Statement presented to the judge for WAVER of the rights to be any longer a “USER”.
---c/. If the “USER” use the property in improper way, which damage the property the “OWNER” has right to ask in a court procedure, the judge to remove the “USER” for using any longer the property.
---d/. If the “USER” does not use the property during 5 or more years period, the “OWNER” has right in court procedure to ask the judge to remove the “USER” for using any longer the property.
7. The “USER” cannot transfer his rights of using the property to anybody.
The Questions:
1. If the “USER” and the “OWNER” are US citizen and the “USER” rent this foreign property, does the “OWNER” has to report something to the IRS.
2. Does the “USER” report the rents received and the Expenses on Form 1040 (Schedule E). In the Form 1040 (Schedule E) Instructions is written to report IF you OWN an interest in a real estate property, but the “USER” does not own.
3. How and who will report the DEPRECIATION of the property.
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