Cross border investing - has it been done in the past - yes; is it being done now - yes; will it continue to be done in the future - we believe so, however it will have ebbs and flows depending on the economic climate in the US. Are there problems with taxation and ownership in the US - that depends upon how you structure yourself before you begin investing.
Cross border investing is something that a lot of Canadians find attractive and the lure of the lower housing prices make Canadians very tempted to purchase real estate in the US. If you are considering investing in US real estate you will probably talk with others to get their impressions and advise on this. Unless they are people that are currently doing this type of business and are familiar with all the ramifications then chances are you will probably hear lots of different responses from them, such as - oh you don't want to do that; you'll be paying double taxes; the IRS will tax you to death; you'll have nothing but headaches; you are not allowed to purchase in the US. etc. Remember to seek advise from those that are already in place building cross border portfolios.
So is it feasible to invest in the US? Is it possible to set up a portfolio that will develop a residual income package for you? Are you going to run into tax troubles that will be more problems and headaches than you are willing to deal with?
The answer, we think, to all of these questions is that it all depends on how you structure yourself in the beginning. Our understanding is that if you decide that you want to purchase a single property in the U.S., under your personal name, to use as a vacation property and then rent it out when you're not down there using it - this is where you will run into problems with tax issues. Our understanding is that if you want to use ANY property to generate rental income you need to structure yourself properly to protect yourself from extra taxation and other problems.
If you want to create a portfolio of multiple properties that will create a passive income for you it is important that you structure yourself properly to deal with this aspect of doing business purchasing US real estate. The organization of a company and all necessary components of the company may seem complex and costly however if you do not structure yourself correctly it will lead to nothing but headaches, lots of confusion and probably much higher taxation than if you are correctly structured. Along with having a lawyer, who is knowledgeable in this type of business, who will structure your company correctly for cross border investing, it is important that you have a GOOD Canadian accountant. Take note that although you may think you already have a good accountant that takes care of your personal taxes and any Canadian investments you may have, you need an accountant who is also very well educated on the way the taxation issues will work across border. They must be very familiar with the taxation processes in the US. You will also need to have a US accountant as you will be doing a Canadian Tax Return and a US Tax Return. We would also recommend that you hire a good US bookkeeper to take care of the daily bookkeeping which will then be given to your accountant come tax time - believe us when we tell you - this will be less expensive than just giving everything to the accountant, have them do all the bookkeeping and then prepare your tax return for you.
Remember - protect yourself - structure, structure, structure - the information contained here is based on our personal experience. You need to คอนโดมือสอง กรุงเทพ educate yourself, make sure you know all the ramifications involved in cross border investing, spend the money to talk to and use the experts to be structured in the way that will be most beneficial to your particular needs - they will save you a lot of money and headaches in the long run.
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