# Buying real estate in US - IRS for American abroad



## nomadenigma (Sep 23, 2016)

Hi,

So I have a bit of a complicated issue here and I hope I can get some advice.

I'm an american living/working abroad and interested in a buying a real estate in the US jointly with my parents (myself as a first time home buyer), but as a minority of ownership (less than 50%).

I like to know what I am getting myself into in terms of filing tax returns in the USA, for example:
1. Can I claim first time home buyer credit?
2. As a part owner of the real estate, does that mean I only need to report portion of the tax I need to file?
3. What happens if we decide to rent out the real estate?
4. Would the tax conditions be changed if I become a larger part (e.g. >50%) or complete ownership of the house in the future?


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## Bevdeforges (Nov 16, 2007)

As an American living and working abroad, you're subject to precisely the same tax rules as anyone back in the Homeland.


> 1. Can I claim first time home buyer credit?


If the property is in the US and you live abroad, I suspect not. First time home buyer credit is for someone buying and occupying a home as their own primary residence. 


> 2. As a part owner of the real estate, does that mean I only need to report portion of the tax I need to file?


Normally, you'd report your share of the investment - however how you own the property could mean you would have to file a Schedule C or some other "business" schedule to break out your share. (Partnership?)


> 3. What happens if we decide to rent out the real estate?


You need to report the rental income and expenses (again, possibly on something like a Schedule C) as a business.


> 4. Would the tax conditions be changed if I become a larger part (e.g. >50%) or complete ownership of the house in the future?


Probably. But the type of ownership comes into play here. If you initially bought 50% and then "bought out" your parents to become full owner, the buy out becomes a sales transaction with tax consequences.
Cheers,
Bev


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