Real Estate Overseas: Smart, Safe, And Unreportable

Swiss Banking May Be Dead… But This Is Better

8938.

That is the number of the IRS form you have to fill out to report foreign financial assets.

If you own foreign assets, you have to fill out IRS Form 8938 even if you’ve lived out of the country for most of your life.

However, here’s an important point: You do not have to report foreign real estate on 8938.

Real Estate Overseas might be the best strategy to have when reporting assets to the IRS.

Here’s the relevant reference from the IRS’s website:

“Foreign real estate is not a specified foreign financial asset required to be reported on Form 8938. For example, a personal residence or a rental property does not have to be reported.”

The IRS wants every dollar and dime it can claw together, right? So why would they leave foreign real estate alone?

It’s a matter of practicality.

Even if they wanted to, how is the IRS (or anyone else, for that matter) going to seize or force the sale of your second home in Belize… your condo in the Dominican Republic… your penthouse in Colombia… your beach house in Mexico… your farmhouse in Portugal… or…

You see my point.

Lawyers, former spouses, friends, employees, and business partners with axes to grind are stone-walled, too. None of them can touch your Panama villa with the avocado and mango trees growing in the backyard… no matter how many attorneys they hire.

For me, this makes a rental in Paris… or Medellín… or Lisbon… a piece of property anywhere in the world… the safest, smartest investment I can imagine.

It’s like having a Swiss bank account that you can stay in on vacation… and that you could even eventually retire to…

The ultimate strategy for both storing wealth and keeping it private.

Now, this strategy born of a significant loophole is not a free-for-all. There are some rules…

You have to report any income you make from the property (the IRS gets their pound of flesh, but they can’t ever take the underlying asset from you).

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