All Forum Posts by: Linda Weygant

Hi Abby,

Somebody in your position may want to consider focusing your search less on physical geography and instead focus your search for a tax professional who has all the skills you're looking for.

With today's technology, most of us tax pros are set up to service our clients no matter where on the planet they are.

Best of luck to you in your search.

There are many great tax professionals here on BiggerPockets.  Take a look at some of the topics that are similar to your needs, read the responses from those accountants, then reach out to them for an appointment.

Best of luck to you!

Aaaaaand.......   Here's an article about the similar law for Portugal.

https://www.theportugalnews.com/news/2025-01-21/calls-to-bri...

 It seems like a reasonable approach, but as you say, we'll have to wait to see what the final version of the law (if it indeed becomes a law) looks like, then figure out if a European corporation with third country investors is a reasonable solution.  I fear the lawyers will become wealthy over this litigation...

Overall, it's an interesting "solution" to the problem of foreign investment in real estate and the lack of adequate housing for the population.  This is true regardless of the country.  Housing has become a "crisis" all over the globe.  While we here on BiggerPockets certainly have financial goals in mind, local populations all over the world have an opposite and opposing one.  One group wants housing prices to increase, the other wants them to decrease.  We'll have to see if there is a solution that makes everybody happy.  I suspect not.

 We'll definitely have to see what happens.  Also, apparently Portugal is considering a similar law, although at this point that's rumors heard in the local cafe.  I haven't seen an official news source yet.

From a tax standpoint, there are additional disclosures to make when selling a business asset for less than fair market value to a related third party.  You don't mention if that's the case, but I thought I'd bring it up.

You also won't be able to recognize any loss on the sale if that's the case.

Bear in mind that for many real estate investors, one of their first priorities is finding a tax professional that matches their needs.  Geography is really secondary.  Most tax professionals are fully capable of serving their clients around the country or world.  I myself have clients on 5 continents.

Do bear in mind that this legislation was proposed a week ago on a 100% tax for non-EU residents.

https://www.bbc.com/news/articles/cr7enzjrymxo

 Not really.  It takes 2 off the table.  And never say never with regard to a lifetime gift limit.  That limit has bounced all over the place for the last 50 years and is subject to congress' whims.  Just because that number seems unachievable now, that does not mean it is.  It's also possible that inheritance tax will be more aggressive or more lenient in the future.  You have no way of knowing.

Henry brings up an excellent point about going into a nursing home where she'll be paying some/all of those fees with Medicare.  They do require that person to have no assets, so a house in her name could be problematic.

A few issues come into play on this.

1.  If you're looking to treat this as a regular rental, then charging undermarket rent throws a monkey wrench in that.  When you charge under market rent, the IRS deems that you do not have a profit motive and, therefore, disallows all rental expenses.  You still claim the income as miscellaneous income and deduct property taxes and mortgage interest (subject to SALT and other high mortgage limitations) on your Schedule A, but that's it.

2.  If you put the house in her name and you have siblings or other folks who would have a claim as a direct heir on her estate, you run the risk of losing the property to another heir.  You can make sure her will states you would inherit it, but it's risky because wills can be changed at any time.

3.  If you do place the property in her name, you've got a Gift Tax (Form 709) to complete.  Unlikely to be any tax due if this is your first gift, but it will count against your lifetime exclusion down the road.  This may come into play as you near the end of life and need to think about estate planning.

4.  If you do place the property in her name, then inherit it later, it does allow for you to receive a step up in basis at that point, allowing you to sell the house shortly after her death without paying capital gains tax.

5.  If you keep the property in your name, but allow her to live in the property, I wouldn't charge her any rent.  That way, her limited funds can go toward her own living expenses.  Since you won't be able to recognize it as a valid rental if you're charging under market rent and you also expect to be covering any house expenses that are outside of her budget, this seems the best choice.  It also makes things cleaner with other potential heirs.