# Foreign rental income earned by US citizen



## Alltimegreat1 (Feb 25, 2015)

I'm a US citizen living and working a normal salaried job in Germany. I've been claiming the FTC for the past two years (FEIE before that).
I'd like to buy a few apartments with my savings and rent them out to American interns.
Is there any way to avoid double taxation on this rental income (taxation by both the German and US government)?


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## Bevdeforges (Nov 16, 2007)

Basically, you just keep on doing what you're doing now (i.e. FTC). Generally speaking, for "real estate income" (i.e. rentals), the primary taxing entity will be the country in which the property is located. I think you're talking about buying German property to rent out to American interns? If so, then you simply declare and pay whatever income tax there is in Germany on the rental income.

You still will have to declare the rental income on your US taxes (under US rules, if those vary from the German rules) but then you take the FTC for the German taxes paid on the rental income. (You'll need a second 1116 form - for "passive" income.) But that should eliminate the double taxation.

Check the US-Germany tax treaty for any "peculiarities" related to Germany, but that's the general scheme for these things.
Cheers,
Bev


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