A company with an EIN on the deed
Title companies and lenders want a US company with an EIN on the deed and the loan.
Cleared by the LLC
Built for · Property
A US LLC for buying US property from outside the United States
This is the one case where we'll tell you Wyoming probably isn't the answer. An LLC that holds a rental in Texas belongs in Texas, and we say so before you order.
01 · Why a US company
What it does for real estate investors.
Buyers abroad hold US property through an LLC to separate it from their other assets, for some privacy, and for a clean structure to sell or pass on.
Read the full explanation
Buyers abroad hold US property through an LLC to separate it from their other assets, for some privacy, and for a clean structure to sell or pass on. The LLC holds the title and the insurance, signs the lease and receives the rent, so the owner is a member of a company rather than a landlord in person.
Because the property is in a particular state, the LLC does business in that state wherever it was formed. A Wyoming LLC holding a Florida house has to register in Florida too, pay both states, and gains nothing. The usual answer is to form the LLC in the property's state.
- 01
Rent paid to the company
The LLC signs the lease and receives the rent into its own account.
March payout+2,300.00 USD - 02
A company on the deed
Title companies and lenders want a US company with an EIN on the deed and the loan.
Owner on the deedAster Property LLC - 03
Your name off the county record
The county's public property record shows the company, not you.
County recordAster Property LLC - 04
The property, apart from you
A tenant's claim is against the company, not your other assets.
Property · YouSeparate accounts
02 · What stands in the way
Three things in the way, and one way through.
Contracts with a company
Property managers, insurers and utilities sign with a company.
Cleared by the LLC
Your name off the property record
An LLC keeps an owner abroad's own name off the county's public property records.
Cleared by the LLC
An LLC formed in the property's state.
It holds the title, signs the lease and receives the rent, with its own EIN and bank account.
Start a company03 · Your options
Three ways to hold a US property from abroad.
The tax is the same in all three: rent and sale gains from US property are taxed in the US. What changes is whose name is on the record and how many states you pay.
| In your own name | A Wyoming LLC | An LLC in the property's stateThe usual answer | |
|---|---|---|---|
| Name on the property record | A cost or a limit: Yours | Works in your favour: The LLC's | Works in your favour: The LLC's |
| A tenant's or visitor's claim | A cost or a limit: Reaches you | Works in your favour: Reaches the LLC | Works in your favour: Reaches the LLC |
| States to register in and pay | Works in your favour: None for the owner | A cost or a limit: Wyoming, and the property's state too | Works in your favour: The property's state only |
| Rent | Neutral: Taxed in the US | Neutral: Taxed in the US | Neutral: Taxed in the US |
| On a sale | Neutral: 15% of the price withheld | Neutral: 15% of the price withheld | Neutral: 15% of the price withheld |
| Yearly US filing | Neutral: Form 1040-NR | A cost or a limit: 1040-NR, Form 5472, and two states' reports | Neutral: 1040-NR, Form 5472, and the state's report |
Works in your favourNeutralA cost or a limitWe form LLCs in Wyoming and Delaware only. For a property elsewhere, form the LLC in its state with a local filer or attorney, and we'll tell you so before you order.
In your own name
- Name on the property record
- Yours
- A tenant's or visitor's claim
- Reaches you
- States to register in and pay
- None for the owner
- Rent
- Taxed in the US
- On a sale
- 15% of the price withheld
- Yearly US filing
- Form 1040-NR
A cost or a limit:
A cost or a limit:
Works in your favour:
Neutral:
Neutral:
Neutral:
A Wyoming LLC
- Name on the property record
- The LLC's
- A tenant's or visitor's claim
- Reaches the LLC
- States to register in and pay
- Wyoming, and the property's state too
- Rent
- Taxed in the US
- On a sale
- 15% of the price withheld
- Yearly US filing
- 1040-NR, Form 5472, and two states' reports
Works in your favour:
Works in your favour:
A cost or a limit:
Neutral:
Neutral:
A cost or a limit:
An LLC in the property's stateThe usual answer
- Name on the property record
- The LLC's
- A tenant's or visitor's claim
- Reaches the LLC
- States to register in and pay
- The property's state only
- Rent
- Taxed in the US
- On a sale
- 15% of the price withheld
- Yearly US filing
- 1040-NR, Form 5472, and the state's report
Works in your favour:
Works in your favour:
Works in your favour:
Neutral:
Neutral:
Neutral:
Works in your favourNeutralA cost or a limitWe form LLCs in Wyoming and Delaware only. For a property elsewhere, form the LLC in its state with a local filer or attorney, and we'll tell you so before you order.
04 · Step by step
From purchase to first rent, done right, in seven steps.
The election in step five is the one that saves the most. Most owners abroad make it.
Step 1: Form the LLC in the property's state
The LLC does business where the property is, wherever it's formed. Forming it there means one state's fees and filings, not two.
Before you buyYou, with a local filerStep 2: Get the EIN, and your ITIN
The LLC needs an EIN for the bank and the title company. You'll need an ITIN to file your own US return; it's applied for on Form W-7 with that first return.
WeeksYouStep 3: Buy and insure in the LLC's name
The deed, the insurance, the utilities and the bank account all in the company's name, with the operating agreement showing who can sign.
At closingYou, with the title companyStep 4: Sign the leases as the LLC
The tenant, the property manager and every contractor deal with the company. Rent goes into the LLC's account, never yours.
Each leaseYou or your managerStep 5: Elect to be taxed on net rent
Otherwise 30% of the gross rent is withheld. Give your property manager a W-8ECI, and on your return elect to treat the rent as effectively connected, so you're taxed on rent minus expenses and depreciation.
Before the first rentYou, with an accountantStep 6: File every year
Form 1040-NR by 15 June when you have no US wages, with the election; Form 5472 for the LLC by 15 April; and the state's own return and report. File even in a loss year, or you can lose the deductions.
Every yearYour accountantStep 7: When you sell
The buyer withholds 15% of the price under FIRPTA. If the tax you'll actually owe is lower, apply on Form 8288-B for a withholding certificate before closing, or claim the difference back on your return.
At the saleYou, with the title company
05 · The honest part
What to know before you order.
Does a foreign owner pay US tax on rent?
Rental income is US-source and taxed
Rent from US property is US-source income. An owner abroad is taxed on it either through 30% withholding on the gross rent or, by election, on the net rent after expenses, which is almost always better and means filing a US return every year.
Read more
When you sell, FIRPTA withholds 15% of the price unless a certificate reduces it. None of this is optional, and all of it is routine for an accountant who does it.
Does a property LLC file Form 5472?
Form 5472 as well
A foreign-owned single-member LLC files Form 5472 with a pro forma Form 1120 every year, even a year with no income.
Read more
It reports what moved between you and the company, and missing it carries a $25,000 penalty. Holding property doesn't change that, and it's separate from your own return on the rent.
Which state should the LLC be formed in?
The state matters twice
The property's state registers the LLC and, if it has an income tax, taxes the rent.
Read more
That's why the LLC is formed there. We file in Wyoming and Delaware, and we'll tell you to form elsewhere if the property is elsewhere.
Sources: IRS, FIRPTA withholding; IRS Publication 519, US tax guide for aliens; IRS, Instructions for Form W-8ECI; IRS, Instructions for Form 5472; IRS, Individual Taxpayer Identification Number.
06 · What it costs
What it costs, line by line.
Ours, where it applies, from our price list. The rest is set by the state and your accountant.
| Cost | Amount | When | What it covers |
|---|---|---|---|
| Launch, Wyoming LLCOptional | $351.40 | First year | Only for a property in Wyoming. $249 to us and $102.40 to Wyoming, at cost. |
| A US tax specialistOptional | $149 | Once | Forty-five minutes on the net-rent election and the yearly returns, before the first rent. |
| Withholding on a sale | 15% | At closing | Of the price, under FIRPTA, unless a withholding certificate lowers it. Credited against the tax you owe. |
| Without the election | 30% | Of gross rent | Withheld before expenses. The election is how most owners abroad avoid it. |
The property's state sets its own LLC fees and may tax the rent too. An accountant who files 1040-NR every season is worth the fee here.
The plan that fits
Launch, if the property is in Wyoming.
Property in another state? Form the LLC there. We'll say so before you order.
Launch
Wyoming property onlyFor your first company, when it needs to exist and nothing more yet.
What it covers
- Your Wyoming LLC, filed, with the state fee at cost
- The EIN the title company and the lender ask for
- An operating agreement that records who owns the LLC
Your personal US return on the rent is separate work for a US accountant.
07 · Questions
Questions from real estate investors.
If yours is not here, email us at hello@baseacross.com before you order.
Elect to be taxed on net rent. Give your property manager a Form W-8ECI, and on your return elect to treat the rental income as effectively connected. You're then taxed on rent minus expenses and depreciation, and file a 1040-NR every year.
Yes. Apply on Form 8288-B for a withholding certificate before closing if the tax you'll owe is lower, or claim the excess back on your return. A buyer who'll live in the home can withhold less, or nothing at $300,000 or under.
Form 1040-NR is due 15 June following the tax year when you have no US wages. The LLC's Form 5472 is due 15 April, and the property's state has its own return.
The rule that has a buyer withhold 15% of the price when a foreign owner sells US property, unless a certificate reduces it.
A Wyoming LLC on Launch is $351.40 for the first year: $249 for Launch and $102.40 to Wyoming, at cost. After that it is $309 a year, $249 to us and $60 to Wyoming.
Ready when you are
Answer the questions. We do the filing.
It takes about four minutes. You see the whole order, Wyoming fee included, before anything is charged.
Step 1 of 10 · About four minutesNothing charged yet
You're startingLLC · WY
Start a companyLaunch · $351.40 · Wyoming fee included