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Level 3

Writing off deductibles in two countries

I run Airbnb in Germany and understand I need to report it in my US tax return.

Both Germany and the USA's return ask for business expenses related to Airbnb.

How do I write off deductibles so I don't get in trouble for claiming them two times in two countries?

 

Thank you!

1 Best answer

Accepted Solutions
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Employee Tax & Finance Expert

Writing off deductibles in two countries

It's okay to include the expense in both countries in order to properly account for the net income correctly.  The accounting may not work out exactly the same in both cases, as each country may not allow for the same deductions for tax purposes, but you should enter the same items on your U.S. tax return that you would as if the property were located in the U.S.. The primary thing that will be different is that the building will depreciate on a different schedule.   

 

When you are reporting the income to the U.S. you want to also be sure that you add any tax paid to Germany on the same income in the section Foreign Taxes Paid. 

 

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Highlighted
Employee Tax & Finance Expert

Writing off deductibles in two countries

It's okay to include the expense in both countries in order to properly account for the net income correctly.  The accounting may not work out exactly the same in both cases, as each country may not allow for the same deductions for tax purposes, but you should enter the same items on your U.S. tax return that you would as if the property were located in the U.S.. The primary thing that will be different is that the building will depreciate on a different schedule.   

 

When you are reporting the income to the U.S. you want to also be sure that you add any tax paid to Germany on the same income in the section Foreign Taxes Paid. 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post