What is USRPI & USRPHC?

US Real Property Interests and US Real Property Holding Company.

 

USRPI = U.S. Real Property Interest includes more than a direct interest in real estate.

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OVERVIEW: 

A U.S. real property interest (USRPI) is a direct interest in real property in the United States or in the stock of a domestic corporation whose assets consist principally of USRPIs.

 

A USRPHC or U.S. Real Property Holding Company.is a domestic corporation with fair market value of its U.S. real property interests equal or exceeding 50 percent of those holdings in the U.S., abroad and other assets held for use.

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USRPI SUBJECT TO FIRPTA WITHHOLDING

•Real Estate: permanent improvements, structures and structural components relating to operation or maintenance

•Real Property including unsevered natural resources such as mines, wells, crops, timber or other natural deposits, and property associated with the use including movable walls and furnishings

•located in the USA, its territories or the US Virgin Islands, and... 

 

Investment Income: Certain income from US sources connected with the trade or business of USRPI.  This is broken down into: 

• Effectively Connected Income (ECI) which is subject to deduction offsets and

• Fixed, Determinable, Annual or Periodical Income (FDAP), which is not.

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Our examiners employ multiple tests to determine if dispositions are assets business activity income.

 

A CORPORATION IS A US REAL PROPERTY HOLDING COMPANY (USRPHC) if 

after performing qualifying tests , the formula for measuring all of its USRPI inside the US and outside plus all other assets held in its trade or business is more than half (50% or more)