Question:
but also pays taxes in the other country for property and income -mostly rent- he gets there. What does he have to do with regard to the IRS, considering the money stays in the other country?
Only serious answers please, if you don't know, ABSTAIN from replying, please.
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Answers:
The income of the property is taxable in the US, since citizens are taxed on income from any source. It is not relevant (on your facts) that the individual is a dual citizen. However, he is also entitled to a credit against US tax for foreign taxes paid, so the US tax will be reduced by some amount. The foreign tax credit is limited by a formula which your tax preparer can explain to you. If for any reason a credit is not allowed, then the foreign tax should be deductible.
You will have to pay taxes on it. I suggest you go to www.irs.gov and look up foreign income.
As far as the IRS is concerned, you only have citizenship here.
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