Benefits of taxing home purchase in the United States

As in Japan, there is a merit of tax saving for purchasing and possession of real estate. Here, we will introduce the points that relate to real estate and tax deduction etc. easily.


(Since it will be a commentary on the overview, please contact CPA, experts in detail for details)


[When purchasing residential property]


Mortgage interest rate + property tax deduction

If you build a mortgage when you purchase a property that lives as your home, that interest portion will be subject to income tax deduction. Also, property tax is deductible, so it is necessary to declare at annual tax return.

Below is an example of a $ 100,000 loan with an annual income of $ 100,000, but you can save a tax of 7665 dollars along with the property tax of the property.

<(Example) When purchasing a property of 700 thousand dollars with an annual income of 100 thousand dollars with a loan of 400 thousand dollars>






【When selling residential property】 


Capital gains tax deduction

If you sell real estate and gain gains on sale, capital gains tax is imposed, but in the case of real estate used as the main residence, tax will be deducted under the following conditions.

■ Maximum gains on sales to be deducted: up to $ 250,000 for single people, up to $ 500,000 for couple combined

■ Condition: The standard deemed to be the "main residence" is the case where he / she has resided for two years or more during the past five years

Even if you are going to change living or return home to Japan, even if you are initially rented, you can receive this deduction as a residential property if you sell it during the period meeting the above conditions.

For example, if you return to Japan and hold it as a rental property for two years and then sell it, you will be eligible for deduction if sale is completed within 3 years from the time you are no longer home. Also, after leaving for three years, if you live as a home again and stay for more than one year, you meet the condition of staying for two years.




Taxation when selling as a non-resident

In the case of selling a property as a "nonresident", regardless of whether or not a profit will be generated by the sale,

Withhold (withholding tax) will be held in escrow.


The conditions of the resident are:

· Residents are those who have a status to live in the United States.

· From the viewpoint of national taxes, from the viewpoint of national taxes, green card holders, like Citizen, need to Tax Return in the US no matter where they live, and as long as they are doing so, they are seen as residents It will be done.

(From the viewpoint of the immigration law, it is a matter of living for more than half a year or reentry permission etc, but from the viewpoint of national taxes, whether or not you pay tax is judgment of residential or non-resident )


Withholding rate of nonresidents:

· Withholding tax is the ratio of national tax = 10%, state tax = 3 + 1/3% against transaction amount.

For example, if you sell a property of 800 thousand dollars, you will not get profits on sale,

$ 800,000 x 13.3333% = about $ 106,666

Is settled by Escrow, withholding tax is paid to the country and state.

· However, if there is no profit from the sale, you can return it by declaring it at the time of Tax Return.

· Whether the tax rate for income changes between resident and non-resident depends on the income etc. of that person, but in the case of non-resident, basic deduction (= Standard Deduction / Married in 2013 Filming Joint is $ 12,200) can not be taken.


(Because it depends on individual case, please be sure to contact CPA, experts)


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In this way, there is a close relationship between buying and selling real estate and taxes, so it is important to consult with experts in advance.







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