# selling u.s house.



## mechelle (Jun 6, 2010)

I am buying a house to do up and then sell. Probably then do it again...
Am i best setting up as a company in the u.s. (for tax reasons ) and if so How?
What tax will i be liable for if the money comes back to the uk...


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## Fatbrit (May 8, 2008)

mechelle said:


> I am buying a house to do up and then sell. Probably then do it again...
> Am i best setting up as a company in the u.s. (for tax reasons ) and if so How?
> What tax will i be liable for if the money comes back to the uk...


You don't mention your immigration status.


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## twostep (Apr 3, 2008)

Flipping residential real estate will probably not be a good biz plan to present for an E2. You are talking major gambling in today's market.

Just FYI - you need to retain a residence for two years for personal purposes unless you want to pay tax on the sale.


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## mechelle (Jun 6, 2010)

twostep said:


> Flipping residential real estate will probably not be a good biz plan to present for an E2. You are talking major gambling in today's market.
> 
> Just FYI - you need to retain a residence for two years for personal purposes unless you want to pay tax on the sale.


I will still be living in the uk , not eligible to gain any kind of visa on the back of this.
I would be classed as a non resident alien, so my bank tells me..


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## Fatbrit (May 8, 2008)

mechelle said:


> I will still be living in the uk , not eligible to gain any kind of visa on the back of this.
> I would be classed as a non resident alien, so my bank tells me..


You will be liable for US taxes including CGT.

If you're not a USC or PR, the IRS will withhold 10% of the sales price until you've settled with them.

Some states tax real estate sales, too, and will also withhold.

You cannot work on the property. You have no right even to visit your property.


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## mechelle (Jun 6, 2010)

Fatbrit said:


> You will be liable for US taxes including CGT.
> 
> If you're not a USC or PR, the IRS will withhold 10% of the sales price until you've settled with them.
> 
> ...


I dont understand why I am not able to do any work on my house??
Also why would i have no right to visit???? i can holiday on the u.s as a normal tourist so whats to stop me visiting my house and how exactly would anyone know?????

This is the first I have ever heard of anything like this...


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## Fatbrit (May 8, 2008)

mechelle said:


> I dont understand why I am not able to do any work on my house??
> Also why would i have no right to visit???? i can holiday on the u.s as a normal tourist so whats to stop me visiting my house and how exactly would anyone know?????
> 
> This is the first I have ever heard of anything like this...


You aren't authorized to work in the US. If renovating houses is your business, you're working. It's not exactly throwing a coat of paint over your holiday home, is it?

If you're entering on the VWP, you have no right of entry or even judicial review (except asylum claims). As you start to build up evidence that you're living here (ratio of time spent in to time spent out, US tax returns, US driver license, etc), expect to be turned back.


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## twostep (Apr 3, 2008)

mechelle said:


> I dont understand why I am not able to do any work on my house??
> Also why would i have no right to visit???? i can holiday on the u.s as a normal tourist so whats to stop me visiting my house and how exactly would anyone know?????
> 
> This is the first I have ever heard of anything like this...


Very simple - you clean up the house with the intention of flipping it. Making a profit in the US. Getting compensated for your efforts. 

Why read posts? Unless you occupy it for two years as your primary residence tax will be withheld at closing. 

You do not file US tax returns - this gain will be tracked by the IRS. As there are taxation agreements in place between US/UK this will flollow you home. 

Are you aware that you are at least five years behind the power curve with this "money making" scheme?


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## mechelle (Jun 6, 2010)

Fatbrit said:


> You aren't authorized to work in the US. If renovating houses is your business, you're working. It's not exactly throwing a coat of paint over your holiday home, is it?
> 
> If you're entering on the VWP, you have no right of entry or even judicial review (except asylum claims). As you start to build up evidence that you're living here (ratio of time spent in to time spent out, US tax returns, US driver license, etc), expect to be turned back.



Thanks for your advice so far .

I think we have crossed wires I will not be doing the work on the houses myself . I have a builder there who is set up to do it ..
and i will not be intending to live in the u.s. I am simply sourcing houses then handing over to builders and real estate agents. Would this still be classed as working??
I was led to understand that if i bought a house to rent out i was allowed to do this so thought that if i flipped it i should be allowed to do this too. 
I was thinking of the business from a tax point of view in the uk and us
i will not be visiting the house , I will not be getting any us driving licenses so hopefully there should not be any issues...


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## twostep (Apr 3, 2008)

mechelle said:


> Thanks for your advice so far .
> 
> I think we have crossed wires I will not be doing the work on the houses myself . I have a builder there who is set up to do it ..
> and i will not be intending to live in the u.s. I am simply sourcing houses then handing over to builders and real estate agents. Would this still be classed as working??
> ...


"I was led"; "I was thinking" ; "should be allowed" - why do you not get facts? 

Unless you can show proper documentation you WILL NOT get a US drivers license. By the way - what does DL have to do with earning income by flipping houses?

If you get your own hands dirty or pay someone to do so - you are earning income in the US thus better get your ducks in a row.


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## Fatbrit (May 8, 2008)

mechelle said:


> Thanks for your advice so far .
> 
> I think we have crossed wires I will not be doing the work on the houses myself . I have a builder there who is set up to do it ..
> and i will not be intending to live in the u.s. I am simply sourcing houses then handing over to builders and real estate agents. Would this still be classed as working??
> ...


You're on quicksand from both an immigration and tax point of view. I'd use professionals to see if the idea is worth pursuing.

visa issues -- AILA's Immigration Lawyer Search
US accountant -- choose one with CPA after their name and with experience of non-resident aliens.
UK accountant.


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## mechelle (Jun 6, 2010)

twostep said:


> "I was led"; "I was thinking" ; "should be allowed" - why do you not get facts?
> 
> Unless you can show proper documentation you WILL NOT get a US drivers license. By the way - what does DL have to do with earning income by flipping houses?
> 
> If you get your own hands dirty or pay someone to do so - you are earning income in the US thus better get your ducks in a row.


I have tried to get" facts " by contacting relevant authorities and have been given different ones so how is one to know whose is correct?????

who do you suggest has the definative answer?
:confused2:

i never intended to get a drivers license but if you read fat brits answer thats why i replied it has nothing to do with selling my house..
I have been researching houses for two years and have been told by u.s departments that as long as i pay u.s tax it is allowed to rent out a house (earning income) but my question was about selling .. 

my confusion came cos fatbrit gave me different info..


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## Fatbrit (May 8, 2008)

mechelle said:


> I have tried to get" facts " by contacting relevant authorities and have been given different ones so how is one to know whose is correct?????
> 
> who do you suggest has the definative answer?
> :confused2:
> ...


In the US consult qualified professionals. Government employees are not obliged to give you the correct legal advice -- USSC has said so!

On the immigration front, a good attorney will ask you a lot of questions about what you are actually doing when over here and how often you are coming and going....and only then advise accordingly. However, even s/he cannot guarantee you entry on a VWP -- that is the sole preserve of the CBP supervisor at the port of entry.

If you're coming over 4 times a year for a week, you'll probably be okay. If you do two back to back 89 days, then you probably won't. If they ask you what you're doing here and you give the wrong answer, that could be end of your US trips, period.

On the tax front, you're in a similar tricky situation. Your answers will not be answerable by 1-800 help lines but will require a professional to plot a route.

You are certainly permitted to rent a house or own a house in the US. You will be liable for tax. However, you have no right to even visit that house.


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## twostep (Apr 3, 2008)

mechelle said:


> I have tried to get" facts " by contacting relevant authorities and have been given different ones so how is one to know whose is correct?????
> 
> who do you suggest has the definative answer?
> :confused2:
> ...




Again - purchase with intention to flip (for profit) is a business. To own and run a business you need the appropriate visa and tax reporting. You can rent what is officially considered owner occupied real estate aka vacation home you do not occupy year round.

I do not know what you consider relevant authorities and what your conversations were. You may want to elaborate.


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