Income Tax: FIRPTA automatic withholding tax on
sale of property. 10% of gross AND 3.33%
additional in California. ($6 million sale, $799,800
No capital gain treatment on sale. Ownership of
US real estate is considered a trade or business and
taxed at higher rates. Maximum rate 35% or
US estate tax owed on net value of real estate in
the event of the foreign owners death. Maximum
rate 45%. Only $60,000 of value can pass without
Income is taxed at a flat 30% fed rate
California is taxed at flat 7% flat rate
Alternative: foreigner can elect to report
Ownership as a trade or business, and p ay tax at
marginal ordinary rates: (15%-35% federal, and
9.9% California. This allows for deductions to
reduce taxable income.
There is no capital gain lower tax rate for foreign
ownership of US real estate.
U.S. Real estate value in 2011 $6 million
Purchased in 2009 5 million
Foreign person dies in CA:
Statutory fees for attorney $73,000
Fed. Estate Taxes $2,415,800
(due within 9 months)
Most likely the U.S. real estate will have to be sold to pay the
fees and taxes due!
Income Tax Strategies:
1. Keep ownership interest at fixed value.
Amount determined by US estate tax limits.
$60,000 allowed for Nonresident alien. No FIRPTA.
2. Create a creditor position for growth potential
in property. No FIRPTA.
3. Participate in a captive insurance program to
insure your real estate ownership. This provides
valuable deductions for income producing real
estate and removes taxable equity build upon sale.
Also provides asset protection for foreign owner.
Estate Tax Strategies:
1. Set up an LLC to own the real estate and have
the LLC owned by a foreign corporation.
2. Have the foreign owners interest in the foreign
company held in trust for their benefit.
(This can be in an asset protection or dynasty trust)
This removes the US real estate from the US estate
tax system. No death taxes due. Provides asset
protection and continuity for the foreign owners
family .NO FEES OR TAXES
DUE. SAVE $2,488,880
Foreign Person US Real Estate
Sets Up LLC
Foreign person is LLC Manager.
Foreign person has fixed equity position in LLC.
Member (Owner of the LLC ) is a
Foreign Company. It loans to LLC to buy.
Foreign company Formed in Zero tax Jurisdiction. Owned by trust for foreign
person and their family. LLC is structured with you as manager—right to
management fee. Foreign corporation ownership value in the LLC grows with
little gain. NO FIRPTA OR CALIFORNIA WITHHOLDING.BECAUSE YOU HAVE
A CREDITOR POSITION AND ASSET PROTECTION.
Delaware LLC pledges real estate for a private placement captive
insurance contract for the foreign owners. Deed of trust is placed on
real estate and UCC financing statement filed on LLC in favor of private
real estate insurance contract.
Cover Premiums Private Real All ownership & value
Due for Business Estate In the protected cell
Liability Insurance on Insurance Belongs to foreigner
Real Estate Contract And their family
This is not commercial insurance. There is a
private licensed captive insurance company in
Belize. Licensed to offer business liability
insurance for business owners.
The business owners contract and rights are held
as a separate protected cell under the main
company. No assets are commingled with others
Business owner can determine the risks to insure,
what premiums are paid and when and how
premiums are invested.
Approved structure under IRS guidelines.
1. Join our program now and own and operate U.S. real estate in
the most tax effective way possible.
2. Protect yourself from creditors
3. Maintain privacy and confidentiality.
4. Take control of your future and reach economic goals.
1. Delaware LLC pledges real estate for a private
placement captive insurance contract to protect equity.
You own the rights to the contract (equity stripping)—
nothing to tax in the U.S. or assets for a creditor to seize.
2. All ownership and value in the protected cell belongs to
you and your family.