ihe

My wife got a GC in January. I am in the US visiting. I have a social security number because I was once in the US on a J visa.

I am under contract to buy a property for which the entire rental is being funded under Section 8.

Because I am not and do not wish to be on the radar of the IRS I had intended to buy it through my wife (who happens to be a licensed realtor). However there are circumstances under which it would be advantageous to be able show the house as my asset.

My wife says Section 8 automatically pass on the details of the landlord - social security number etc (mine is of course not valid for work) to the authorities (I presume IRS).

I'm not trying to dodge taxes - after all with the property in my wifes name she'd pay them, but I am wondering whether I am right in presuming that I would be dragged into the IRS filings net if I appeared as the owner, or whether it might jeopardise the section 8 tenancy or the transaction for any reason to have a non permanent resident landlord.

penguinsix

I think you're going to need some professional advice on this matter. It is a bit complicated and even if you do get someone who has some experience in something like this you'll probably want to have it verified by an attorney with some experience in cross-border tax issues.

As a general observation, have you or your wife considered setting up some US shell corporation for the purpose of this transaction? An LLC or something. This is not for the purpose of tax avoidance or even paperwork avoidance as the LLC would have to either pass through the income to the owners of the corporation or file as a corporation itself, and it would also have to declare if there was a foreign owner which is another set of forms. But from a liability standpoint, you might want the protection from lawsuits from a building full of Section 8 tenants. A corporate structure would keep your personal assets safe, whereas you or your wife buying as an individual would expose you to some significant risk.

Like I said, probably best for a professional review once you decide how to proceed.

Good luck.

Tarkak9

I second what penquinsix says. Especially about minimizing risk and exposure from liability; more specific example, something like a meth lab or some other environmental hazard etc. In addition of exploring the LLC route, now would be a time to research adequate and sufficient insurance coverage for the building, LLC and yourselves. In addition, chances are, your wife's E&O insurance (which she has to have as licensed realtor) doesn't cover personal transactions/properties.... so there is potential exposure right there as agent LL, and if/when she sells.

If there is a loan in the picture or do you plan to own outright? I can think of areas to double check with a lender ahead of time; as a B2 visa alone may present issues for a lender, all lenders are different with their underwriting, tho.
If you're on contract then you're on title at closing and then you may start to raise flags upon yourself. - How do you plan to be able to prove it as your asset if you're not on title? (something like a will showing you as beneficiary or a claim to the property is a future potential asset and not current actual asset; besides, wills change and one can always sell the property beforehand etc). Your states' marriage laws may come into play too. HUD or a local housing authority dealing with sec 8 should be able to answer your question about if NPR LL would compromise receiving sec 8 funds for rent.

ihe

Thanks. There is no lender involved.

Extreme

I'm a Section 8 landlord. Great program, but screen your tenants.
Yes, they need a tax id to report their payments to the IRS. To me there is no clear connection that the titled owner and the landlord receiving the Section 8 payments has to be the same entity, i.e. it could be two different tax ids.
I don't think Section 8 looked at my deed to make sure it matched up.

I also recommend to put the title in a LLC for liability protection. I would suggest to not tax it as a corporation though, since the corporate capital gains tax is pretty steep.

ihe

I'd like to thank all respondents for their very informative answers. Sincerely.