US citizen that has no income generating foreign property.

Forum|Forum|2 years ago
January 8, 2024
1 reply
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Have a property in France that family lives in. They do not pay us any rental, but pay any taxes that are due in France.

I am not making any money from the property. I assume I need to report that I have the property, but do I have to pay taxes to the US government even though I'm not making any income from the property?

Not A Product Question

Anonymous_

Employee

If the property is rental real estate, you should enter it into the program despite the fact that it is located in a foreign country.

laurentkm2Author

Thanks for the reply.

The property is not a rental. The family overseas owns it and lives in it. I am just listed as one of the owners, but am not making any money from it at the moment. In this case, would I still need to pay some kind of tax here in the US?

TomD8

Employee

You are correct that the property is not "rental property". But since the property is lived in by family members and is "not held out for rent or resale", then per IRS Publication 936 (page 4) you may regard it as a "qualified home" for purposes of the mortgage interest deduction.

https://www.irs.gov/pub/irs-pdf/p936.pdf

Unfortunately, per the Tax Cuts and Jobs Act of 2017, foreign property taxes are no longer deductible.

Bottom line: there is nothing to enter on your tax return unless you are able to itemize deductions and to deduct mortgage interest.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.