How to report foreign rental income from Belgian agricultural property on US taxes?
I've got a bit of a tax headache brewing and could use some guidance. My family owns farmland in Belgium that we lease out to local farmers. Currently, it's generating about €13,000 annually, but that's expected to increase substantially in the coming years as we've expanded the acreage. My wife and I are living and working in the US on green cards, and I'm confused about our tax obligations here. In Belgium, they don't tax the rental income (just annual property tax on the land itself). I'm stressing because I've been reading that I might need to report this income on our US tax returns, which seems bizarre to me since this property has zero connection to America. Does the IRS even know about foreign property holdings? Where do I even start with reporting this properly? I want to avoid any compliance issues, but the whole situation feels like a mess. Anyone dealt with foreign rental income while living in the US? Any advice on forms or procedures would be much appreciated!
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Lucas Adams
Yes, as a US green card holder (permanent resident), you're considered a US tax resident and are required to report your worldwide income to the IRS, including rental income from foreign properties. This is regardless of whether that income is taxed in the foreign country. You'll need to report this income on Schedule E of your tax return. You may also need to file FBAR (FinCEN Form 114) if you have foreign financial accounts that exceed $10,000 at any point during the year. Additionally, depending on the structure of your ownership, you might need to file Form 8938 (Statement of Foreign Financial Assets). The good news is that you can claim deductions against this rental income, including property taxes paid in Belgium, maintenance expenses, insurance, and depreciation. You may also qualify for foreign tax credits for any taxes paid to Belgium, though it sounds like the rental income itself isn't taxed there.
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Chloe Green
•Thanks for the response! This is more complicated than I thought. So even though Belgium doesn't tax the rental income directly, I still have to pay US taxes on it? That seems like double taxation in spirit, if not technically. Do you know if there's a tax treaty between the US and Belgium that might help with this situation? Also, what counts as a "foreign financial account" for FBAR purposes? We have a Belgian bank account where the rent payments go, but it's usually under €10,000.
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Lucas Adams
•Yes, you still need to report the income to the US regardless of Belgium's tax treatment. The US taxes global income for residents and citizens. There is indeed a tax treaty between the US and Belgium, but it likely won't exempt this rental income from US taxation. It primarily prevents double taxation, which isn't an issue here since Belgium doesn't tax the rental income. For FBAR purposes, any financial account (checking, savings, investment) held outside the US qualifies. The $10,000 threshold applies to the aggregate value of all your foreign accounts combined. If at any point during the year the total value of all your foreign accounts exceeds $10,000, you need to file the FBAR.
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Harper Hill
I went through something similar with farmland my family owns in Germany. The whole foreign income reporting thing was driving me nuts until I found https://taxr.ai - it was a lifesaver for analyzing foreign rental documents and figuring out exactly what needed to be reported. I uploaded my German tax statements and rental agreements, and it showed me exactly what lines on Schedule E to complete and how to handle the currency conversion properly. Their system actually caught that I could depreciate the structures on the land (not the land itself), which saved me thousands. It also flagged that I needed to file that FBAR form the previous commenter mentioned since my German accounts went over $10k briefly.
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Caden Nguyen
•How accurate was it with the currency conversion? That's one of my biggest headaches with some similar property I have in Spain. Do they handle calculating average exchange rates for the year, or do I need to track that separately?
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Avery Flores
•Sounds interesting but I'm skeptical. Does it actually help with the FBAR filing itself? That form is what gives me anxiety every year. And does it explain the difference between FBAR and Form 8938 reporting? I'm never clear on when I need both.
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Harper Hill
•It handled the currency conversion perfectly - you can choose whether to use the IRS yearly average rate or input specific exchange rates for each transaction date. For my rental income, I just used the annual average which simplified everything. For FBAR, it doesn't file the form for you since that goes through FinCEN's website, but it gives you a complete worksheet showing exactly what accounts need to be reported and the maximum balances to enter. And yes, it has a really clear explanation of when Form 8938 is needed versus just FBAR - in my case, it determined I needed both because my rental property value exceeded the 8938 thresholds.
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Avery Flores
Just wanted to follow up on my experience with taxr.ai after trying it for my foreign property situation. I'm honestly impressed with how it handled my complex scenario. I have rental properties in both the UK and France, and it correctly identified that certain UK rental expenses weren't deductible under US rules even though they were in the UK. The document analysis feature saved me hours of headache - it extracted all the relevant numbers from my foreign tax statements and even flagged potential audit triggers I hadn't considered. The exchange rate tools alone were worth it. I ended up with a clear Schedule E, properly allocated expenses, and confidence that I wasn't missing any required disclosures. Definitely using it again next year when my overseas income gets more complicated.
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Zoe Gonzalez
If you need to talk directly with the IRS about your foreign property reporting requirements, good luck getting through to anyone! After trying for weeks to get specific answers about my New Zealand rental property, I found https://claimyr.com and their service was incredible. They got me connected to an actual IRS agent within 20 minutes when I had been trying for days. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone tree for you and call you back when they have an agent on the line. The IRS person I spoke with gave me specific guidance on reporting my New Zealand rental and confirmed exactly which forms I needed beyond Schedule E.
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Ashley Adams
•Wait, how does this actually work? I'm confused about how a third-party service can get through to the IRS faster than I can directly. Do they have some special access or something?
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Alexis Robinson
•I don't buy it. I've heard about these services before and they sound like scams. The IRS is notoriously unreachable - how could they possibly guarantee getting through? And what's stopping them from recording your conversation or stealing your information?
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Zoe Gonzalez
•They use an automated system that continuously redials the IRS until they get through - something most of us don't have the time or technology to do. They don't have special access, just a persistent automated system. They don't record or listen to your conversation at all. Once they get through to an IRS agent, they connect the call to your phone number and completely drop off the line. It's just you and the IRS agent at that point. They make money by charging a fee for the service, not by collecting information. I was skeptical at first too, but after wasting hours on hold myself, it was absolutely worth it to get clear answers about my foreign property reporting.
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Alexis Robinson
I need to eat my words about Claimyr. After my skeptical comment, I decided to try it anyway out of desperation when preparing my taxes this season. I had specific questions about FATCA reporting for my Chilean rental property that nobody online could clearly answer. The service actually delivered exactly what they promised. I got a call back in about 30 minutes with an IRS agent already on the line ready to help. She walked me through the specific reporting requirements for foreign rental income and confirmed I didn't need certain forms I was worried about. The peace of mind was worth every penny, and it saved me from overpaying by incorrectly reporting my foreign expenses. Still amazed it actually worked after spending countless hours on hold in previous years.
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Aaron Lee
Don't forget about state taxes too! Depending on which state you live in, you might need to report that Belgian rental income on your state return as well. Some states have different rules for foreign income than federal. I learned this the hard way with my rental property in Mexico. I reported everything correctly on my federal return but didn't realize California wanted their cut too. Got a nasty surprise assessment letter the following year.
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Chloe Green
•Oh no, I hadn't even thought about state taxes! We're in New York - do you know if they follow the federal rules for foreign income or have their own system? This is getting more complicated by the minute.
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Aaron Lee
•New York generally follows federal rules for income inclusion, so if you're reporting the rental income on your federal Schedule E, you'll need to include it on your NY return too. The one benefit is that NY does allow credits for foreign taxes paid, similar to the federal system. Some states like Nevada or Florida might be more advantageous for people with significant foreign income since they don't have state income tax. But for now, plan on reporting that Belgian rental income on both federal and NY returns.
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Chloe Mitchell
Has anyone mentioned Form 8833? If you're planning to take a position based on the US-Belgium tax treaty, you might need to file this form to disclose your treaty-based position. I had to do this with my rental properties in France.
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Michael Adams
•Good point! Though I think Form 8833 is only required if you're taking a position that's contrary to the treaty or if you're claiming the treaty overrides an internal US law. Not everyone with foreign property needs it.
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