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Requirements Under The HIRE Act

“Lief, when I subscribed to your Simon Letter, I was hoping for clarification regarding reporting requirements for overseas assets such as real estate held by U.S. citizens. Do you have any information or other articles on this?

“Specifically, I’m wondering if, for example, right now, you own real estate (that you may want to rent out), is it a reportable asset under HIRE? I know that the income would be reportable. But, if you owned a US$500K piece of land that you were just holding, it would not be?”

–Bill M., United States

Correct…as long as it’s held in your personal name.

Right now, real estate isn’t reportable to the IRS. Once the new FACTA/HIRE rules are promulgated, it is likely that real estate held in a U.S.-controlled foreign corporation will have to be reported, as, once HIRE takes effect, all assets over US$50,000 will have to be reported. In the case of a U.S.-controlled foreign corporation, individual assets are part of the reporting and would include real estate.

I’ll be covering these rules and reporting requirements in detail in future issues of the Simon Letter. It’s not possible to publish a definitive guide right now, as some of the rules and deadlines for compliance continue to be revised.

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