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Are there any corporation alternatives to owning your house in a S.A.? US tax law does not allow a house owned by a S.A.and used for rental to be considered eligible as a rental property for depreciation and deduction of expenses vs revenues. Private ownership in one’s own name opens up the can of worms re personal ( unlimited) liability!! Help please!
First this country may look like the USA, but it no way functions like the USA. So everything you have quoted does not apply here in Costa Rica. I would suggest you buy and carefully study Scott Oliver’s book on buying property in Costa Rica. I worked in law offices most of my career in the USA so you need to understand the ways of Costa Rica. Scott does the best job on this subject I have seen written in English. The reason I have my property as a single person is it has to do to access to property without the huge burden of a protracted, expensive process here when either you and/or wife die. After reading Scott’s book, then you need to understand for your particular state the law about trying to have a will in your home state where you might have heirs IF YOU can even add your property here to your USA will. I couldn’t in Oregon because not state court will manage and/or probate property in Costa Rica.
I have purchased and owned a piece of property here since 2009 and never have been to either build and for health reason live on it. Why? Beautiful view of the mountains but to high up for emergencies health service to come to my aid in time to save my life.
Your best situation would be from my pint of view is to come here, do George Lundquist’s tour ( I think may still have George’s interviews on this site, and carefully study the advice on ARCR for additional information. I wasted money by buying property here because my house value crashed 2008–2009 which was to be my building fund.
There is a glut here, some say until 25 years but I don’t know if that is true or not, of houses here in areas of most interest to USA expats. I will totally in TICO neighborhood on a family-owned street which is what I like. But you many need more of the with more interaction with people from our home country. You can find a rental for a few months to a year and maybe even years that fits a budget then if you need to return to the USA for health reasons, you are not adding your house to the glut of high end house already existing here. Also you need to understand that Costa Rica has dozens upon dozens of climate zones so you can find the area where you don’t need to run air conditioning here where the electrical rates are over the top.
Many come here and many return return in one to three years for many reasons. The biggest one is that they are not prepared to live in a Central American country where so many of their systems, practices, customs and way of life are not visible on a two week trip!
This is a nice country, I love the people, I love the weather up in the mountains outside of Grecia, but in my daily life here the Ticos don’t care in anyway if you don’t like how to do things. USA consumer goods are expanding here but many thing imported goods can cost a lot of money depending on your monthly budget.
Come and take George’s tour, he is a honest man and will tell you the truth of living here if you have ears to hear. Before doing that, read Scott Oliver’s books and look at this sight your interviews and postings.
Moving to Costa Rica has been a great adventure for me because I have to jettison many of my parochial ideas from the USA on how a country should both operate and exist for my convenience and best interest.
Good luck to you, come and see us, rent for at least a year, don’t let your stateside assets burn a hole in your pocket, and you can find the cool breezes I am enjoying in my house this morning while I write this response. It is a nice morning in San Roque de Grecia and the very good news is I have fresh eggs for breakfront plus the coffee here is worth the move!
You may want to get a paid consultation through …
Don Nelson’s daughter lives in CR and he is both a US accountant and attorney living in California. His consultations via Skype or phone are (were) $300 but he is an expert in his field and can advise you whether to use an SA or SRL (which can be designated a flow though corporation like an LLC). He can tell you what individual tax forms that you will need to file to avoid several hundred thousands of IRS disclosure penalties, etc. Some folks only care about “cheap”. If you recognize that quality information is worth paying for, you may want to give a consultation with a knowledgeable person consideration. I can tell you that I wish that I had talked to him before forming an SA. Now, I file a form 5426, 8938, and 926 every year.
$300 would have been the deal of a lifetime as I would now be able to use very simple software such as TaxAct rather than going through what I do every year.
I also have a Private Charitable Foundation that requires a Form 990PF that is a nightmare all it’s own. My annual tax return looks like a NYC telephone book.
[quote=”Cancertomnpdx”]
I have purchased and owned a piece of property here since 2009 and never have been to either build and for health reason live on it. Why? Beautiful view of the mountains but to high up for emergencies health service to come to my aid in time to save my life.
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The first question that I have always asked myself before buying property is “If I were to have a heart attack right now, what is it going to take …. and how long is it going to take to get me to world class medical care?”
If the answer exceeds “The Golden Hour” …. the deal is off !!
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