The Internal Revenue Code deﬁnes a “U.S. person” as a citizen or resident of the U.S., a domestic partnership, a domestic corporation, a US. estate, and certain trusts.1
The determination of when an individual is deemed a non-resident alien and a resident alien of the U.S. differs in the context of income taxation from the context under the estate and gift tax regime.
When used in this guide, the term “foreign” or “foreigner” refers to a non-resident alien of the U.S., both in the income tax and in the estate and gift tax context.
The federal tax implications of foreign ownership of U.S. real property can be divided into three main categories:
- Federal income taxation
- Transfer taxation (estate and gift tax)
- Foreign Investment in Real Property regulated by the withholding requirements of the Tax Act of 1980 (FIRPTA)