Tonny miller Real Estate

There is some exciting news for foreign investors due to recent geo-political developments and the emergence of several financial factors. This coalescence of events, has at its core, the major drop in the price of US real estate, combined with the exodus of capital from Russia and China. Among foreign investors this has suddenly and significantly produced a demand for real estate in California.

Our research shows that China alone, spent billion on U.S. housing in the last 12 months, much more than they spent the year before. Chinese in particular have a great advantage driven by their strong domestic economy, a stable exchange rate, increased access to credit and desire for diversification and secure investments.

We can cite several reasons for this rise in demand for US Real Estate by foreign Investors, but the primary attraction is the global recognition of the fact that the United States is currently enjoying an economy that is growing relative to other developed nations. Couple that growth and stability with the fact that the US has a transparent legal system which creates an easy avenue for non-U.S. citizens to invest, and what we have is a perfect alignment of both timing and financial law… creating prime opportunity! The US also imposes no currency controls, making it easy to divest, which makes the prospect of Investment in US Real Estate even more attractive.
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Here, we provide a few facts that will be useful for those considering investment in Real Estate in the US and in particular. We will take the sometimes difficult language of these topics and attempt to make them easy to understand.

This article will touch briefly on some of the following topics Taxation of foreign entities and international investors. U.S. trade or of entities and individuals. Effectively connected income. Non-effectively connected income. Branch Profits Tax. Tax on excess interest. U.S. withholding tax on payments made to the foreign investor. Foreign corporations. Partnerships. Real Estate Investment Trusts. Treaty protection from taxation. Branch Profits Tax Interest income. Business profits. Income from real property. Capitol gains and third-country use of treaties/limitation on benefits.

We will also briefly highlight dispositions of real estate investments, including U.S. real property interests, the definition of a real property holding corporation U.S. tax consequences of investing in United States Real Property Interests through foreign corporations, Foreign Investment Real Property Tax Act withholding and withholding exceptions.

Chis Mecalientito Realesate

The purpose of an , Corporation or Limited Partnership is to form a shield of protection between you personally for any liability arising from the activities of the entity. offer greater structuring flexibility and better creditor protection than limited partnerships, and are generally preferred over corporations for holding smaller real estate properties. aren’t subject to the record-keeping formalities that corporations are.

If an investor uses a corporation or an  to hold real property, the entity will have to register with the California Secretary of State. In doing so, articles of incorporation or the statement of information become visible to the world, including the identity of the corporate officers and directors or the  manager.

An great example is the formation of a two-tier structure to help protect you by creating a California to own the real estate, and a Delaware to act as the manager of the California . The benefits to using this two-tier structure are simple and effective but must one must be precise in implementation of this strategy.

In the state of Delaware, the name of the manager is not required to be disclosed, subsequently, the only proprietary information that will appear on California form is the name of the Delaware as the manager. Great care is exercised so that the Delaware is not deemed to be doing business in California and this perfectly legal technical loophole is one of many great tools for acquiring Real Estate with minimal Tax and other liability.

Regarding using a trust to hold real property, the actual name of the trustee and the name of the trust must appear on the recorded deed. Accordingly, If using a trust, the investor might not want to be the trustee, and the trust need not include the investor’s name. To insure privacy, a generic name can be used for the entity.
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In the case of any real estate investment that happens to be encumbered by debt, the borrower’s name will appear on the recorded deed of trust, even if title is taken in the name of a trust or an . But when the investor personally guarantees the loan by acting AS the borrower through the trust entity, THEN the borrower’s name may be kept private! At this point the Trust entity becomes the borrower and the owner of the property. This insures that the investor’s name does not appear on any recorded documents.

Because formalities, like holding annual meetings of shareholders and maintaining annual minutes, are not required in the case of limited partnerships and , they are often preferred over corporations. Failing to observe corporate formalities can lead to failure of the liability shield between the individual investor and the corporation. This failure in legal terms is called “piercing the corporate veil”.

Limited partnerships and may create a more effective asset protection stronghold than corporations, because interests and assets may be more difficult to reach by creditors to the investor.

To illustrate this, let’s assume an individual in a corporation owns, say, an apartment complex and this corporation receives a judgment against it by a creditor. The creditor can now force the debtor to turn over the stock of the corporation which can result in a devastating loss of corporate assets.