Tax Example: Rent

Taxation Researcher | September 01, 2010

Non-resident couple´s joint monthly rental income1 US$1,500 US$6,000 US$12,000
Annual Rental Income US$18,000 US$72,000 US$144,000
Less Costs2 (20,000) (40,000) (60,000)
Less Depreciation (10,455) (34,848) (69,697)
= Taxable Income US$0 US$0 US$14,303
Income Tax Rates3
Up to US$8,375 10% - - -
US$8,376 - US$34,000 15% - - 2,145
US$34,001- US$68,650 25% - - -
US$68,651 - US$104,625 28% - - -
US$104,626 - US$186,825 33% - - -
Over US$186,826 35% - - -
Annual Income Tax Due US$0 US$0 US$2,145
Any Other Taxes nil nil nil
4% Gross Receipts Tax4 - - US$1,440
Annual Tax Due US$0 US$0 US$3,585
Tax due as % of Gross Income 0% 0% 2.49%
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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 September 1, 2010.

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 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.

4 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$225,000, the first US$9,000 monthly income is exempted from gross receipts tax.

 

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