Foreign Residential Rental Property

Forum|Forum|1 year ago
March 19, 2025
1 reply
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I recently acquired residential rental property in Germany. Rental depreciation in Germany for tax filing is different from that in the US. I had a loss in 2024, can I offset that loss against income on my US tax return or must I wait until I have income from that rental and offset it against that? Also, what is the depreciable life? I have heard different numbers; some say the home must be depreciated over 30 years, and some say say should be depreciated over 40 years. Which is correct?

JamesG1

The residential rental property is reported on Schedule E. The loss will be subject to the at-risk rules and passive activity limits as outlined on page 19 of IRS Publication 527.

@DavidD66 here explains that foreign rental property is either 30 or 40 year property, depending upon when the property is placed in service. Assets placed in service after 2018 are depreciated over a 30 year period.

You will identify the property as foreign when the rental activity is established.

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w961hmkAuthor

Thanks for confirming. I had decided to use ADS depreciation based on 30 years straight line prior to your response, so my assumption was correct. Thanks for your help.