Paying taxes on property overseas
I am US citizen living in the Philippines. I have three condos totaling over US$200,000. They are not used for making income at the moment. I keep reading that I do not have to report my properties to the IRS if no income is being made is this true? I also have read that if the properties are over 200,000 that might make a difference. Is this true as well?
Answers
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Quick question, are all three condos in the USA or in the Philippines?
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Philippines
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Philippines
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Since your condos in the Philippines are not generating income and are likely held directly in your name, you do not need to report them to the IRS on Form 8938 or any other tax form at this time. The $200,000 reporting threshold for Form 8938 applies to specified foreign financial assets—such as foreign bank accounts, stocks, or mutual funds—not to directly owned real estate, so the value of your condos doesn’t trigger this requirement unless they’re held through a foreign entity like a trust or corporation. However, if you have other foreign financial assets, such as bank accounts with an aggregate value over $10,000, you may need to file an FBAR (FinCEN Form 114), and if the total value of your specified foreign financial assets exceeds $200,000 (or $300,000 at any time during the year for those living abroad), you may also be required to file Form 8938. If your situation changes—such as beginning to rent out or selling the condos—it’s important to reassess your U.S. tax obligations.
In all cases, consulting a tax professional familiar with both U.S. expat tax laws and Philippine property ownership is highly recommended, especially if your condos are held through a more complex structure.
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