I'm a non-U.S. person who owns rental properties in the U.S. What are my tax obligations?

If you own a rental property in the U.S., you’re required to file an annual nonresident tax return (Form 1040NR) to report gains or losses from rental activity.

You are also required to file an annual nonresident state return, unless the property is located in a tax-free state such as Texas.  

Annual reporting is required even if you generate a loss. This is because when you choose to sell your property, all accumulated losses (if any) are deducted from the sales proceeds. If you don’t report annually, these losses cannot be recovered. If the property is idle (no rental activity), you are not required to report.

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