How to handle USA taxes when investing from overseas?

[Catherine Underwood]

I live in the UK, but I am hoping to purchase property in California to rent out as Air BNB. What's a good place to look for tax advice? I want to pay all taxes that are legally due, so I would need advice on how to pay taxes in USA.

I also know that governments often have incentives to allow one to legally minimise tax, so I would like advice on this too.

I've tried contacting various tax specialists in the area where I am planning to purchase property but none of them deal with international customers. Any ideas?

Please note: I want to 100% pay all tax that is legally due, so I don't want any schemes that avoid this or involve breaking the law.

[Saul L.]

@Catherine Underwood - 

From my experience of a number of years as a non-US RE investor this issue requires a few hoops to jump through but is really not a problem once you are set up.

I would look for a US licensed CPA based in the UK- (This should not be too difficult to find.) The advantage is the ability to meet face to face, exchange documents and possibly liaise with your UK CPA. As far as I know there is a double taxation treaty between the UK and the USA- such that you would be credited on your UK return for any tax paid in the US. You would need to retain their services to submit an annual report to the IRS, a copy of which your UK accountant should receive as well- and there is not much more to it.

You will need a US tax number (called an ITIN) before you will be able to pay taxes- normally the CPA can handle that application as well.