The Core Principle
US citizens are subject to federal income tax on worldwide income regardless of where they live, what visa they hold, or what tax they pay locally. This does not change when you move to Phuket.
FBAR — Foreign Bank Account Report
If your Thai bank account balance exceeds $10,000 at any point during the calendar year — even for one day — you must file FinCEN Form 114 (FBAR) annually with the US Treasury. Filed through the BSA E-Filing System at bsaefiling.fincen.treas.gov — separate from your IRS return. Deadline: April 15, auto-extended to October 15. Non-willful penalty: up to $10,000/violation/year. Willful: up to $100,000 or 50% of account balance. File it every year.
FATCA
Thailand is FATCA-compliant. Thai banks report US-person accounts to the IRS annually. Your SSN is required when opening a Thai account. The IRS will know about your account regardless of whether you disclose it.
The 2024 Thai Remittance Rule Change
In 2024, Thailand changed its rules on foreign-sourced income. For Thai tax residents (183+ days annually), foreign income remitted to Thailand may now be subject to Thai income tax regardless of when it was earned. For non-resident American buyers (fewer than 183 days), this change has limited direct impact. For buyers planning extended stays, consult a Thai tax advisor before establishing Thai tax residency.
Rental Income — US Tax Treatment
Rental income from your Phuket property is taxable in the US on Schedule E. Thailand imposes 15% withholding tax on gross rental income for non-resident foreign owners — your management company handles this deduction. The US-Thailand Tax Treaty generally provides a credit for Thai taxes paid against your US liability, preventing double taxation.
Capital Gains on Sale
Any gain is taxable in the US as a foreign capital gain. Long-term rates (0%, 15%, or 20%) apply if held more than one year. Thai transfer taxes at sale are deductible as selling costs. Section 1031 exchanges and Section 121 primary residence exclusions do not apply to foreign property.
The FET Form and Repatriation
When you eventually sell, Thai law requires documentation proving the original purchase funds came from abroad. This is your Foreign Exchange Transaction (FET) form issued at purchase. Keep it permanently.
Can I use a self-directed IRA to buy in Phuket?
Yes, through a Self-Directed IRA with a custodian permitting international real estate. The IRA holds the property — you cannot personally use it while IRA-owned. All rental income and appreciation compound tax-deferred (Traditional) or tax-free (Roth). Suitable for pure investment buyers only.
BHHS New England Properties