What are the rules for taxation of foreign real estate?

In the state of Hawaii, the rules for taxation of foreign real estate depend on how the property is acquired and used. The general rule is that any foreign real estate owned by a non-resident of Hawaii is subject to the same taxes that would be applicable to U.S. citizens or residents. Real estate gains or losses that are generated through the sale of foreign real estate by a non-resident are subject to the federal capital gains tax. The rate of the tax depends on the amount of the gain and the length of ownership. Non-residents are also required to pay state income tax on all income earned from their foreign real estate in Hawaii. In some cases, non-residents may be able to deduct expenses related to their foreign real estate from their federal income tax returns. Such expenses may include mortgage interest, property taxes, and other local fees. However, it’s important to note that these deductions may be limited and can vary based on the individual’s residency status. In summary, foreign real estate owned by non-residents of Hawaii are subject to both federal and state taxation. The extent of the taxes varies depending on the type of gain or loss generated, as well as the length of ownership. It is important to consult with a tax professional for more detailed information.

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What are the rules for taxation of foreign real estate?

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