H-1B Visa Holders: Can You Earn Rental Income from Abroad?

Many H-1B workers worry that earning rental income from homes or apartments outside the United States 🇺🇸 might violate their visa. It doesn’t. You’re allowed to keep or buy foreign real estate investments and collect rent from them, as long as you follow U.S. tax rules.

Below is a clear, step‑by‑step walk‑through of the full journey, from checking your status to filing the right forms and planning your timeline.

Step 1: Confirm That It’s Allowed Under H-1B Rules

Timeframe: Immediate

U.S. immigration law does not ban H-1B holders from:

• Owning property abroad
• Receiving rental income from those properties
• Holding that income in foreign bank accounts

The H-1B visa focuses on your U.S. job, not on passive investments overseas. As long as you:

• Keep working only for your H-1B employer (and any approved concurrent H-1B employer), and
• Don’t run an active business abroad that requires your day‑to‑day work,

your foreign real estate investments do not break H-1B conditions.

You do not need advance permission from USCIS to receive rent from a home or apartment outside the country.

Key takeaway: Passive rental income from foreign properties is permitted on H-1B — the visa limit is on employment, not passive investments.

Step 2: Check If You’re a U.S. Tax Resident or Nonresident

Timeframe: 1–2 days if you review your days in the U.S. carefully

Immigration status and tax status are different. On H-1B, you can be either:

• A U.S. tax resident — you pass the substantial presence test, or
• A nonresident alien for tax purposes

Why this matters:

• Tax residents must report worldwide income, including foreign rental income.
• Nonresidents usually report only U.S.‑source income, though tax treaties or special rules can change this.

Read the IRS guidance on tax residency on the IRS page for U.S. citizens and resident aliens abroad.

Most H-1B workers become tax residents after they spend enough days in the U.S. during a year, so in many cases foreign rent must be declared on a U.S. return.

Step 3: Track Your Foreign Rental Income During the Year

Timeframe: Ongoing, month by month

From the moment you start renting out your foreign property while on H-1B, keep organized records:

• Total rental income received
• Currency and exchange rates used for each payment
• Dates of each payment
• Related expenses, such as:
  • Property taxes
  • Mortgage interest
  • Insurance
  • Repairs and maintenance
  • Property manager or agent fees

You’ll later report income and expenses in U.S. dollars, so keeping clear notes now will save time at tax season.

According to analysis by VisaVerge.com, H-1B holders who start record‑keeping early find it much easier to show that their foreign rental activity is passive investment, not active employment.

Step 4: Prepare for U.S. Tax Filing Season

Timeframe: 2–4 weeks before the filing deadline

If you’re a tax resident, you must report your foreign rental income on your annual U.S. tax return, usually Form 1040. The official instructions are on the IRS page for Form 1040.

Typical steps include:

1. Convert income to U.S. dollars
   • Use a reasonable, documented exchange rate (for example, yearly average from a trusted source) for rent you received in foreign currency.
2. Calculate net rental income
   • Deduct ordinary and necessary expenses tied to the rental to reduce taxable income.
3. Report on your return
   • Your tax preparer may use a specific schedule for rental income. The core return is still Form 1040 if you’re a tax resident.

If you’re a nonresident alien, you may instead use Form 1040-NR. Rules are more complex for nonresidents, so many H-1B holders in that situation work with a tax professional who handles cross‑border issues.

Step 5: Handle Extra Reporting (FBAR and FATCA)

Timeframe: 1–2 weeks to collect account details the first year; 1–3 days in later years

If rent from your foreign property goes into a foreign bank account, you may need extra forms:

• FBAR – FinCEN Form 114
  • File if the total value of all your foreign financial accounts is more than $10,000 at any time during the year.
  • Filed electronically through the U.S. Treasury. See FinCEN page for FBAR (FinCEN Form 114).
• Form 8938 (FATCA)
  • File if your foreign assets (including certain real estate held through entities/accounts) exceed FATCA thresholds. See IRS page for Form 8938.

Important points:

• These are reporting forms — filing them doesn’t automatically mean you owe more tax; they inform the U.S. government about foreign accounts and assets.
• Failing to file when required can bring heavy penalties. Treat these requirements seriously.

Step 6: Use Tax Treaties and Foreign Tax Credits to Avoid Double Tax

Timeframe: 1–3 weeks, often with help from a tax professional

If the country where the property is located also taxes your rent, you may worry about double taxation. Generally:

• The U.S. has tax treaties with many countries.
• You may be able to claim a foreign tax credit on your U.S. return for tax you already paid abroad on the same rental income.

What you should do:

• Keep proof of taxes paid in the foreign country (statements, receipts, or official tax returns).
• Provide these to your tax preparer so they can claim credits where allowed.

This is a tax‑planning step and does not affect your H-1B immigration status.

Step 7: Answer Future Immigration Questions Confidently

Timeframe: During H-1B extensions, transfers, and green card processes

Owning foreign property and receiving rent may be asked about on immigration forms and interviews, for example:

• DS‑160 forms for visa stamping
• Green card applications where you list income or assets

To prepare:

• Keep copies of your filed U.S. tax returns showing foreign rental income.
• Keep FBAR and Form 8938 filings (if required).
• Store foreign property documents and local tax records.

If a consular officer or USCIS officer asks about your foreign real estate, you can explain that:

• The rental income is passive,
• You reported it as required, and
• It does not involve unauthorized U.S. work.

Step 8: Decide When to Seek Professional Help

Timeframe: 1–2 weeks to find and meet the right adviser

Some H-1B holders can manage simple foreign rentals on their own. Consider hiring a qualified tax professional if any of these apply:

• You own several properties in different countries
• You use companies, trusts, or family members to hold title
• You move in and out of the U.S. and are unsure of your tax residency each year
• You’re starting a green card process and want everything consistent

A short meeting with a cross‑border tax adviser or an immigration‑savvy accountant can save money and stress later.

Quick Checklist

• Keep your U.S. employment limited to authorized H-1B work.
• Track rental income, expenses, and exchange rates in detail.
• Determine U.S. tax residency and file the correct tax forms (Form 1040 or 1040‑NR).
• File FBAR (FinCEN Form 114) and Form 8938 if thresholds apply.
• Claim foreign tax credits or treaty benefits to avoid double taxation.
• Keep records for immigration filings and consider professional advice for complex situations.

Final note: Owning property abroad and earning rental income is fully compatible with the H-1B visa, provided you treat it as an investment, keep orderly records, and meet U.S. tax and reporting obligations each year.