Last week we discussed some of the issues that can arise with the ownership of foreign real estate. Here is one situation we encountered:
A decedent died owning land in the Dominican Republic. The executor was unable to locate the appropriate documentation to prove ownership. After speaking with a realtor, it was decided that the legal costs associated with obtaining title and transferring the property would probably exceed the value of the property. A decision was made to abandon the property.
How can this type of problem be avoided? Consult with an attorney and/or accountant in the foreign county where your property is located. Make sure your executor and heirs know where any relevant documents are located, as well as the contact information of the professionals you have worked with so they can deal with the property efficiently and effectively.
Our staff can help you address the U.S. tax implications of owning foreign real estate and work with your foreign accountant and attorney handling any foreign reporting requirements. With our international network of accounting firms, we can refer you to a reputable tax adviser in the foreign country. Stay tuned for another example next week.