tax deductions for foreigners investing in the US.

[Account Closed]

I just finished reading about the tax deductions for rentals, and noticed it mentioned deducting long distance travel (air fare).  Would that include air fare for someone coming from another country to check up on their property?  Also, would it include the initial trip to look for property?  I realize that I would need to find a property manager, etc..  all this will take time and money.  It would be great if I could deduct at least part of the initial cost.

[Linda Weygant]

The expense to search for a property in a region where you do not currently invest is not deductible until you actually invest in that area.  Then you add that costs of that "research" (plus any other research expenses) to the Basis of the property.  You then depreciate that over the life (27.5 years for residential, 39 years for commercial).

Travel expenses to check on your property become deductible in the year the expense is incurred and pro-rated in a business vs personal manner.

For example, if you travel to the area for a week and spend the whole week to work on the property making repairs, showing the property to potential tenants, etc., then the whole trip is deductible.  However, if you travel and spend one day to check up on the property and then spend the rest of the time on vacation, then only the percentage of time spent dealing with the property is deductible.  So if you spend 1 day out of 7 on the property, then 1/7 of all your expenses are deductible.