@mftempleton , I will try and answer your questions by grouping a little -- hopefully this will work:
(A) On what items of cost can be expensed on Schedule-E, please see this Document produced by IRS -- it goes into great detail.:
About Publication 527, Residential Rental Property (Including Rental of Vacation Homes) | Internal R...
(B) On exchange rate quandary ---- ideal case is to use the dollar of the day ( against UKL ) but failing that you can use monthly average or yearly average rates -- just be consistent is using the same source. and of course keep records to prove your case ( if , in that rare case that you get audited ).
(C) On allocation due to different tax year calendar :
Recognizing that UK runs on April 6th to the April 5th of the following year, you will have to do essentially what you are suggesting i.e. take the Jan 1st through April 5th. of 2023 from UK year 22 filing and April 6th 2023 through Dec. 31st of 2023 from UKL tax year 2023/2024. For expenses and income it is easy because those are actuals.. Depreciation will be computed by TubroTax and so no worries there. The burden (Foreign Taxes paid ) can only be estimated based on the year before and included but this would mean that you may have to file an amended return after the UK taxes are settled. Or you wait to file your return after settlement of UK. Note that because you are abroad, your tax filing date is June15th without any extensions and October 15th with extension. The tax payment date ( i.e. without interest and penalties ) is till April 15th.
(D) On FBAR / FATCA regs:
Yes , as an US person ( citizen/ GreenCard ), you are indeed subject to FBAR ( filed at www.FinCen.gov -- form 114 and ONLINE ONLY ). File by April 15th or earlier -- it is not a tax event but non-filing when required to can attract onerous fines.
You are also subject to FATCA regs -- form 8938 filed with your return.
Here is a comparison of FBAR and FATCA requirements :
Comparison of Form 8938 and FBAR requirements | Internal Revenue Service (irs.gov)
(E) on the subject of entity ;
This becomes messy as it depends on the kind of entity you operate. But generally, if it is sole proprietor or a sole owner Limited liability entity ( called LLC in the USA and Uk I think is Ltd.), then under US laws it is a disregarded entity for purposes of US tax filing. Note that the emphasis is on "Sole owner". In the USA you would file a schedule-E or a schedule-C.
For a C-corp, the entity stands on its own -- you file your return under UK laws ( because it was registered under UK laws ) -- you just need to recognize the income you get from the entity. There is a similar set up for partnerships.
I think I have covered all your questions.
If this has satisfied your query, please consider accepting the answer so that thread will close.
Of course you will still be able to add to it as needed.
Is there more I can do for you ?
pk
