10% Wear & Tear allowance on US rental property

[Raj]

I am planing to buy a property in the US for rental income.

Reading someones earlier question, I established that normal revenue expenses like morgage interest are deductable.

Can I claim the 10% wear & Tear allowance on the US property.

Also under the double tax treaty with the US, Who receives the income tax, The U.K or U.S (I will not be living in the U.S)

If the U.S ends up with the tax, will they except the 10% wear tear allowance.

[Ian McTernan CTA]

You need to consult a US tax expert (called CPAs) to find out what is claimable in the US, including depreciation on the property.

The income is taxable in both countries, with any US income tax being allowable against UK tax. Beware of local taxes and property taxes, dependent on which state you buy in, as these are not deductible!

You may be required to file a US Return. There are a number of firms that handle US taxes based in the UK, and they should be your first port of call.

Ian McTernan CTA
Chartered Tax Adviser
McTernan Associates Ltd
ian@imcternan.com