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    ragad3's Avatar
    ragad3 Posts: 3, Reputation: 1
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    #1

    Oct 26, 2012, 09:52 AM
    Taxation of Rental Income for Indian F-1 Student
    Hi, I am an Indian Citizen and Resident, studying in the US with an F-1 Visa. I'm renting out my car through an online website, and I get 60% of the rental rate as income.

    As long as this is reported to the IRS on a 1099-MISC in Box 1 (rental income), I think I am safe and this will not jeopardize my F-1 status.

    However, when it comes to paying tax on this rental income, I would like to know if the 30% rate applies to me? I tried to read the India-US tax treaty and in one of the articles there is something to the effect of some types of income not allowed to be taxed by the US. Can someone that is more familiar with the treaty explain if this rental income would still be taxable?

    I don't think this is rental income from a real property (immovable property), since my car is very much movable. I am aware of some clauses that deal with such income, but I guess my case is different?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Oct 26, 2012, 11:36 AM
    The rental incomeis U.S.-sourced only if the car is in the United States.

    If the rental income is.U.S.-sourced, you report it on Schedule E and pay the progressive tax rates that U.S. citizens pay by using Form 1040nr.
    ragad3's Avatar
    ragad3 Posts: 3, Reputation: 1
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    #3

    Oct 26, 2012, 11:59 AM
    Quote Originally Posted by AtlantaTaxExpert View Post
    The rental incomeis U.S.-sourced only if the car is in the United States.

    If the rental income is.U.S.-sourced, you report it on Schedule E and pay the progressive tax rates that U.S. citizens pay by using Form 1040nr.
    Yes, I agree that it is taxable in general. But I was wondering if any provision of the tax treaty between India and US provides exemptions for this.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #4

    Oct 26, 2012, 12:04 PM
    No. Rental income in the U.S. is taxable under both treaty and U.S. tax law.
    ragad3's Avatar
    ragad3 Posts: 3, Reputation: 1
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    #5

    Oct 26, 2012, 01:12 PM
    Quote Originally Posted by AtlantaTaxExpert View Post
    No. Rental income in the U.S. is taxable under both treaty and U.S. tax law.
    Oh, okay. Thank you for the clarification!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #6

    Oct 26, 2012, 01:25 PM
    Glad to help!
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