Costa Rica help please

[WITAXLADY]

A great tax client - well he was! is buying a rental in CR - He has a Real Estate Atty there handling the purchase but they want  me to handle the US part

So is this foreign taxes now?

Does the US person need a LLC here in the US (WI)? to be the owner - for liability and ownership?

Or is the SA enough?

Should I tell him to find someone else! He does not want to but.. it is for 2023 - so I can learn with help or my NATP question.

Thank you,

D from more snow coming!

[Slippery Pencil]

Are you an attorney?  What does the US part consist of?

If you're only handling the US part, what does it matter to you if there are foreign taxes?  Take the foreign tax credit if applicable.

How would a WI LLC limit his CR liability?  If you're not an attorney don't advise him on this.

FinCen 114 will be applicable if he has a CR bank account w/ more than $10k and possibly 8938 if it exceeds $50k.

3520 may come into play, but not if he buys it in his own name.  Same with 5471.

Depreciate over 30 years instead of 27.5.

Unless you're leaving out a bunch of info, this sounds simple.

[WITAXLADY]

well - do I file his CR taxes or does he find a CR tax preparer?

Sch E rentals sound quite simple there..

Can he bring $$/earnings  into the US  - from cash? thru a bank? Legally?

[Slippery Pencil]

54 minutes ago, WITAXLADY said:

well - do I file his CR taxes or does he find a CR tax preparer?

Is your previous answer to this question wrong?

On 4/3/2023 at 6:48 PM, WITAXLADY said:

they want  me to handle the US part

 

56 minutes ago, WITAXLADY said:

Can he bring $$/earnings  into the US  - from cash? thru a bank? Legally?

Are you an attorney?

 

 

[Catherine]

12 hours ago, WITAXLADY said:

well - do I file his CR taxes or does he find a CR tax preparer?

Sch E rentals sound quite simple there..

Can he bring $$/earnings  into the US  - from cash? thru a bank? Legally?

You don't file his Costa Rica taxes unless you know CR tax law. He's on his own, or he can find someone down there. Note that many other countries are not on a calendar-year tax filing year. You may need to put him on extension in order to get final CDR tax numbers from him.

Sch E rental reported here should indeed be simple if prior information given is correct. Use Form 1116 to take credit for tax paid to CR. Make sure to adjust for calendar vs fiscal year mismatches.

Of course he can bring his earnings into the US legally - best not to try cash, though, but deposit any cash to a CR bank. Then transfer to a US bank, and that US bank will report any transactions over $10,000, but that's just reporting. Wire transfers are the usual method. 

[WITAXLADY]

Thank you!

Yes, CR is Feb filing due.. ends in Oct or something.

We did the LLC and the RE atty is handling it..

He wanted to put it under his current very successful LLC/S corp and I talked him into a separate LLC for liability reasons, let alone taxation.

Thank you

And a Blessed Happy Easter to all.

D