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News & Tips from an ITIN Acceptance Agent

ITIN for US rental property - Rental income held by managing agent?

Just Breve - ITIN for US rental property - Rental income held by managing agent?

Are you a foreign landlord of a US property that is rented?

Just Breve can assist individuals who own US rental property and the rental income is being held by the managing agent until an ITIN is issued.

Why are they holding my rent income?

All payers of US source income have to establish if the correct amount of US tax is withheld on the payment. Where rent is held back, the reason for the hold will be because the managing agent does not have the ITIN number for the foreign owner. Where this number does not exist, they cannot pay out without withholding the correct amount of US tax. The reason for this, is because all payments are reported to the IRS and if the managing agent incorrectly pays the money to you, they then become liable for any tax due if a mistake was made.

1040NR - US tax return reporting rental income

All owners of US property that is rented have to file a 1040NR US tax return (and possibly a state tax return), reporting the income and expenses to the IRS (and state if applicable). That's because the rental property is classed as having a US trade or business. This is where activities are regular, substantial and continuous (i.e. profit orientated activities generated from US assets). This is also known as effectively connected income (ECI).

An ITIN is required by the managing agent to report the ECI received by you to the IRS. This is then matched by the IRS to the 1040NR US tax return, to ensure the income has been reported correctly.

All foreign owners who have ECI have to file a US tax return to report the income and be able to take the appropriate deductions against that income (e.g. expenses relating to the rental property).

Can you assist with the ITIN application?

Yes Just Breve can assist from start to finish. Where rental income exists, we will require supporting documents to be attached to the application. This will be either the 1040NR US tax return or a letter from the managing agent on headed paper, advising you have rental income in the current tax year. We provide the template wording.

Once the ITIN is submitted, it can take 7 to 11 weeks to be issued. Currently with Covid19 delays - this timescale is doubled (as a minimum) due to staff shortages at the ITIN unit.

Once issued, you will receive an ITIN notice listing the number which you then provide to the managing agent.

Contact us today:

T: 0208 1444632

We are based near London Heathrow and the M4/M25 motorway. Parking is available on site. By appointment only. We also offer video based certifications, but you will need to mail the document being certified to us, as we need to see the original. This will be returned securely to you.


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