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Our company based in the US rents villas in Mexico. Do we need to report to IRS remittances to Mexican homeowners whose villas are rented out.

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Our website registered and operated out of US, lists oceanfront villas and condos that are located in Riviera Maya, Mexico. Some of these Villas and Condos are owned by Mexican nationals. Once we rent a property we collect the rental subtract our commission and remit the balance to the homeowner who is a Mexican national. Are we obligated to report to the IRS the amount of funds remitted to this foreign national.

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Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

No. You need to report any payments (1099 or 1042) made to US Citizens and those who are working in the US or its possessions. So, if you pay a Mexican national for work done in Mexico, there is no reporting that payment to the IRS or associated Mexican authority (based on the info you provided).

Obviously you record full rental sale and associated COGS, leaving the net revenue you use as the top-line basis for US taxes owed by your company.

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