US Virgin Is.: Worked Example of Tax on Rent

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Last Updated: Oct 10, 2007

Tax Example: Rent

Non-resident couple's joint monthly rental income¹		US$1,500	US$6,000	US$12,000
Annual Rental Income		18,000	72,000	144,000
Less Costs²		(20,000)	(40,000)	(60,000)
Less Depreciation³		(25,192)	(72,941)	(132,430)
= Taxable Income		nil	nil	nil
Income Tax Rates⁴
Up to US$18,450	15%	–	–	–
US$18,450 – US$44,575	28%	–	–	–
US$44,575 – US$70,000	31%	–	–	–
US$70,000 – US$125,000	36%	–	–	–
Over US$125,000	39.60%	–	–	–
Annual Income Tax Due		nil	nil	nil
Any Other Taxes		nil	nil	nil
4% Gross Receipts Tax⁵		nil	480	3,360
Annual Tax Due		nil	US$480	US$3,360
Tax due as % of Gross Income		nil	0.67%	2.33%
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on October 10, 2007.

Notes

¹ The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner). The nonresident couple is electing to treat their income as effectively connected income.

² Estimated values. Allowable deductions are insurance payments, commissions, management fees and expenses associated with rent collection, repairs and maintenance expenses.

³ Estimated values. Allowable deductions are insurance payments, commissions, management fees and expenses associated with rent collection, repairs and maintenance expenses.

⁴ These income tax rates are for married couples filing separately. Nonresident married couples are not allowed by law to file jointly in the US Virgin Islands.

⁵ Every individual doing business in the islands are liable to pay the 4% gross receipts tax in addition to the income tax. If annual gross receipts are less than US$150,000, the first US$5,000 monthly income is exempted from gross receipts tax.