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Title 26, Internal Revenue CodeRelease 119-110

§6039C Returns with Respect to Foreign Persons Holding Direct Investments in United States Real Property Interests

Title 26 › Subtitle F — Procedure and Administration › CHAPTER 61 — INFORMATION AND RETURNS › Subchapter A — Returns and Records › PART III — INFORMATION RETURNS › Subpart A — Information Concerning Persons Subject to Special Provisions › § 6039C

Last updated Sep 23, 2026|Official source

Summary

Foreign people who directly own U.S. real estate must file a yearly return. The return must give the owner’s name and address, describe the U.S. real property they held during the year, and include any other facts the Secretary of the Treasury requires under rules. A person counts for this rule if they did not do business in the United States during the year and the fair market value of the U.S. property they directly held at any time that year was $50,000 or more. “United States real property interest” is defined in section 897(c). “Foreign person” means anyone who is not a U.S. person. Property owned by a partnership, trust, or estate is treated as owned in proportion to the partners or beneficiaries. Property owned by a spouse or a minor child is treated as owned by the individual. Returns must be filed when and how the Secretary’s rules say. Nonresident aliens or foreign corporations taxed under section 897(a) (and people who must withhold under section 1445) pay tax and file to the United States for U.S. property and to the Virgin Islands for Virgin Islands property.

Full Legal Text

Title 26, §6039C

Internal Revenue Code, Source: USLM XML via OLRC

(a)General rule
To the extent provided in regulations, any foreign person holding direct investments in United States real property interests for the calendar year shall make a return setting forth—
(1)the name and address of such person,
(2)a description of all United States real property interests held by such person at any time during the calendar year, and
(3)such other information as the Secretary may by regulations prescribe.
(b)Definition of foreign persons holding direct investments in United States real property interests
For purposes of this section, a foreign person shall be treated as holding direct investments in United States real property interests during any calendar year if—
(1)such person did not engage in a trade or business in the United States at any time during such calendar year, and
(2)the fair market value of the United States real property interests held directly by such person at any time during such year equals or exceeds $50,000.
(c)Definitions and special rules
For purposes of this section
(1) United States real property interest
(2)Foreign person
The term “foreign person” means any person who is not a United States person.
(3)Attribution of ownership
For purposes of subsection (b)(2)—
(A)Interests held by partnerships, etc.
United States real property interests held by a partnership, trust, or estate shall be treated as owned proportionately by its partners or beneficiaries.
(B)Interests held by family members
United States real property interests held by the spouse or any minor child of an individual shall be treated as owned by such individual.
(4)Time and manner of filing return
All returns required to be made under this section shall be made at such time and in such manner as the Secretary shall by regulations prescribe.
(d)Special rule for United States interest and Virgin Islands interest
A nonresident alien individual or foreign corporation subject to tax under section 897(a) (and any person required to withhold tax under section 1445) shall pay any tax and file any return required by this title—
(1)to the United States, in the case of any interest in real property located in the United States and an interest (other than an interest solely as a creditor) in a domestic corporation (with respect to the United States) described in section 897(c)(1)(A)(ii), and
(2)to the Virgin Islands, in the case of any interest in real property located in the Virgin Islands and an interest (other than an interest solely as a creditor) in a domestic corporation (with respect to the Virgin Islands) described in section 897(c)(1)(A)(ii).

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1986—Subsec. (d). Pub. L. 99–514 inserted “(and any person required to withhold tax under section 1445)” after “section 897(a)”. 1984—Pub. L. 98–369 amended section generally, inserting in section catchline “foreign persons holding direct investments in” and substituting in text provisions concerning returns with respect to foreign persons holding direct investments in United States real property for provisions concerning returns with respect to United States real property interests. 1981—Subsec. (b)(4)(C). Pub. L. 97–34, § 831(e), substituted “For purposes of determining whether an entity to which this subsection applies has a substantial investor in United States real property, the assets of any person shall include the person’s pro rata share of the United States real property interest held by any corporation (whether domestic or foreign) if the person’s pro rata share of the United States real property interests exceeded $50,000” for “The assets of any entity to which this subsection applies shall include its pro rata share of the United States real property interests held by any corporation in which the entity is a substantial investor in United States real property”. Subsec. (f). Pub. L. 97–34, § 831(a)(3), added subsec. (f).

Statutory Notes and Related Subsidiaries

Effective Date

of 1986 AmendmentAmendment by Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

Effective Date

of 1984 Amendment Pub. L. 98–369, div. A, title I, § 129(c)(2), July 18, 1984, 98 Stat. 660, provided that: “The

Amendments

made by subsection (b) [amending this section] shall apply to calendar year 1980 and subsequent calendar years.”

Effective Date

of 1981 AmendmentAmendment by Pub. L. 97–34 applicable to dispositions after June 18, 1980, in taxable years ending after such date, see section 831(i) of Pub. L. 97–34, set out as a note under section 897 of this title.

Effective Date

Section applicable to 1980 and subsequent calendar years, with 1980 being treated as beginning on June 19, 1980, and ending on Dec. 31, 1980, see section 1125(b) of Pub. L. 96–499, set out as a note under section 897 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 6039C

Title 26, Internal Revenue Code

Last Updated

Sep 23, 2026

Release point: 119-110