Do I have to pay tax to the IRS on property I own and rent out in UK

[Yardley]

Hi
Just need to find out if we have to pay tax to the IRS on property that I own and rent out in UK. We are green card holders and pay all the usual taxes in the US. Also submit a tax return in the UK yearly, but have been told there may be US tax to pay on our UK property. Any advice is greatly appreciated.

[belgarath]

You will have to declare your UK income to IRS, but you can deduct the taxes you pay in the UK.

[Bevdeforges]

The IRS requires you to declare your worldwide income each year, which would include rental property income in the UK or elsewhere. You then take whatever income taxes you pay to the UK as a foreign tax credit on form 1116.
Cheers,
Bev

[Yardley]

Originally Posted by Bevdeforges

The IRS requires you to declare your worldwide income each year, which would include rental property income in the UK or elsewhere. You then take whatever income taxes you pay to the UK as a foreign tax credit on form 1116.
Cheers,
Bev

Many thanks, that was very helpful.

[AnotherOpinion]

Also, there are lots of deductions in the U.S. for rental property. Any and all expenses related to renting it out can be deducted, plus the US allows you to depreciate a portion of the value of the house, you can deduct payments for the mortgage, property mgmt agency, insurance, property taxes, maintenance and repairs, travel expenses to check on the property, etc. I have rental property and by the time I calculate all the deductions, there's nothing left to pay taxes on, and in fact can deduct a pretty good amount from my regular income. And if you're paying UK taxes on top of that, of course that is deducted from any taxes as well.