Buying US Real Estate: Own Name or LLC? Guide for Brazilians

Buying US real estate in your own name is the simplest route, but it ties the property to the individual, including for US estate tax. Through an LLC, the property is separate from the owner, but a controlled entity arises that requires an annual balance sheet in Brazil and, generally, Form 5472 in the US. No route avoids FIRPTA or Brazilian taxation.

Own Name or LLC: What Changes for a Brazilian?

The choice changes who appears as the owner, which forms exist in each country and how the assets pass to heirs. The table summarizes the points that official sources confirm. LLC costs and setup are covered in the specific guides on Delaware LLC and Florida LLC.

How Does FIRPTA Work When the Property Is Sold?

FIRPTA requires the buyer to withhold 15% of the amount realized on a sale by a foreign person. The IRS describes the withholding as applying to the amount realized, which adds up the cash paid, the fair market value of other property and the debts assumed by the buyer. It is not calculated on the profit.

The buyer is, in most cases, the withholding agent. If the seller is foreign and the buyer does not withhold, the buyer can be held liable for the tax. Payment to the IRS uses Form 8288, filled out by the withholding agent.

There are situations in which withholding is not required. The IRS lists, among others, a purchase for use as a residence at a price of up to US$ 300,000, with a plan to live in the property, and a withholding certificate issued by the IRS itself. If the withholding exceeds the tax owed, the IRS instructs the nonresident to file a return to claim a refund of the excess withheld.

If the Brazilian sells through a disregarded single-member LLC, the IRS treats the owner as the seller, not the entity. The LLC, therefore, does not remove FIRPTA. If the LLC elects to be taxed as a corporation, the rules change. The IRS provides, for example, a 21% withholding on the gain when a foreign corporation distributes US real property to foreign shareholders. That case requires a US lawyer.

Is Rental Income From US Property Taxed for a Brazilian?

Yes. The IRS splits a nonresident's income into two categories. Fixed or determinable annual or periodic US-source income (FDAP) pays a flat 30% tax, with no deductions, or a lower rate if an applicable treaty exists. Income connected with a US trade or business is taxed at progressive rates, after deductions.

Rental property income can be treated as the second category by the taxpayer's choice. In that case, the IRS requires a return filed on time for the deductions to be accepted. The choice between "30% on gross" and "progressive rates on net" depends on the size of the expenses and should be simulated by a US accountant before the first payment is received.

In Brazil, a resident who receives income from sources abroad, such as rent, reports it in the monthly carnê-leão and in the annual return, according to the Receita's IRPF Questions and Answers. The same manual has sections on crediting tax paid abroad, which have their own requirements.

How Does Brazil Tax Property Bought in Your Own Name?

The gain on sale follows the individual's capital gain rules, not the financial investment table. Law 14,754/2023 says, in art. 2, § 2, that gains on assets and rights abroad that are not financial investments remain subject to art. 21 of Law 8,981/1995.

The gain is the positive difference between the sale price and the acquisition cost (Law 7,713/1988, art. 3, § 2). The art. 21 rates of Law 8,981/1995, as worded by Law 13,259/2016, are progressive:

In practice, the rate ranges from 15% to 22.5%, depending on the size of the gain. The tax is paid by the last business day of the month following the month the gain was received, and does not go into the annual adjustment (art. 21, §§ 1 and 2). This applies to those who are tax residents of Brazil.

Currency conversion is the technical point. IN SRF 118/2000, which detailed the conversion of gains on assets bought in foreign currency, is listed as revoked by IN RFB 2,180/2024. The IRPF Questions and Answers I consulted, for tax year 2024, describe converting to dollars and then to reais at the Central Bank rates on the payment and receipt dates. Check the most recent edition before calculating, because the rule that detailed this conversion was revoked.

The property goes in the Assets and Rights (Bens e Direitos) section. The Receita manual asks for a description of the asset, the acquisition value in foreign currency and the value in reais.

How Does Brazil Treat Property Held Inside an LLC?

An LLC held by the Brazilian is a controlled entity. Art. 5, § 1, of Law 14,754/2023 covers "companies and other entities, with or without legal personality" in which the individual has the majority of the rights or more than 50% of the capital or profits.

Rent counts against the LLC. Art. 5, § 5, II, subjects to the December 31 regime a controlled entity with own active income below 60% of total income. Paragraph 6, I, "e", excludes rents from own active income. An LLC whose revenue is only rent therefore tends to have active income close to zero. Paragraph 9 removes this rule only for those whose main activity is real estate development or civil construction in the country where it is located.

Under this regime, profits are taxed on December 31 of each year, at 15% (art. 2, § 1), even without distribution. The controlled entity's annual balance sheet is required (art. 5, § 10), in IFRS or Brazilian standards. The LLC is transparent for the IRS, but that does not remove the balance sheet Brazil requires.

The Law offers an alternative. Art. 8 allows reporting the controlled entity's assets and rights as if they were the individual's. The option is irrevocable as long as the individual holds the entity, and all individual partners resident in Brazil must join. In that case, the income follows the nature of the asset, which brings the treatment closer to property held in your own name.

If the LLC does not fall under the cases in § 5, art. 6 taxes the profit only when it is made available to the Brazilian. Art. 6-A lets you opt for the annual regime.

The costs of maintaining the LLC and preparing the balance sheet count. Ask for a simulation in international tax planning and compare the corporate structures options.

What About Inheritance Tax on US Property?

The IRS taxes a nonresident's estate on assets located in the US. The list includes US real estate and shares of US corporations. The executor must file Form 706-NA when the fair market value of those assets on the date of death exceeds US$ 60,000.

The IRS notes that estate tax treaties can limit what is considered located in the US. The page does not detail an interest in an LLC. If the property is inside one, the classification for this tax should be analyzed by a US lawyer, not assumed.

In Brazil, the ITCMD (state inheritance and gift tax) can also apply. The Constitution (art. 155, § 1, III) requires a complementary law to regulate jurisdiction when the deceased had assets abroad. Complementary Law 227/2026, art. 158, II, says that, for real estate abroad, the State of the domicile of the deceased or the donor has jurisdiction, if they lived in Brazil. The maximum rate is set by the Senate (art. 155, § 1, IV). To plan succession on both sides, see the succession planning service.

Which Returns Does a Brazilian Need to File?

There are three fronts in Brazil and two in the US. The list below is the practical order each year.

1. •IRPF, Assets and Rights: report the property, or the interest in the LLC, or the underlying assets if you choose art. 8 of Law 14,754/2023.
2. •IRPF, income: rent in the carnê-leão and in the annual return, or the controlled entity's profit on December 31.
3. •CBE at the Central Bank: BCB Resolution 279/2022 includes, in art. 7, real estate abroad (item VIII) and interests in non-resident companies (item I). The annual declaration is mandatory when the total exceeds US$ 1 million on December 31, between February 15 and April 5 of the following year (arts. 10 and 13).
4. •US, income and sale: Form 1040-NR when there is income to report or withholding to claim back.
5. •US, LLC: Form 5472 when a foreign-owned LLC has a reportable transaction. The penalty for not filing is US$ 25,000.

To see the offshore structure as a whole, read how to structure investments abroad.

How Do You Decide Between Your Own Name and an LLC?

Use the steps below in order.

1. •Define the goal: vacation home, long-term rental or resale.
2. •Simulate US tax on rent in both cases (30% on gross or progressive rates) with a US accountant.
3. •Simulate Brazilian tax in both scenarios: capital gain in your own name, or the controlled entity's profit on December 31, with the art. 8 option as an alternative.
4. •Ask the US lawyer for an analysis of estate tax and liability to third parties for each structure.
5. •Build the calendar of obligations in both countries before signing the purchase.

Financing for nonresidents depends on each bank's policy. Ask for the terms in writing, without relying on generic market numbers.