Jeffrey L. Rubinger, of Bilzen Sumberg, writes that:

A foreign investor that directly invests in U.S. real estate through a foreign corporation may be subject to an effective tax rate exceeding 54 percent. This results from a combination of the taxes incurred under FIRPTA as well as the 30 “percent branch profits” tax.  A much more tax-efficient alternative to a direct investment, that still gives the foreign investor complete exposure to U.S. real estate, would be through a total return swap.

via Synthetic Investment in U.S. Real Estate by Foreign Investors | Bilzin Sumberg – International Taxation – JDSupra.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.