Yes. If you are a U.S. tax resident, rental income from Japanese property generally must be included in your U.S. income tax return.
Receiving rent in a Japanese account without transferring it to the United States does not remove the reporting requirement. Filing and paying tax in Japan also does not, by itself, eliminate U.S. reporting.
Reference: IRS — Taxation of U.S. Residents
1. Review Rental Income and Expenses
Review rent, management fees, repairs, insurance, property taxes, and loan interest to determine allowable expenses and depreciation.
Mortgage principal is not a rental expense. Repairs and improvements may receive different treatment.
2. Japanese Taxable Profit May Differ from U.S. Taxable Profit
Expenses and depreciation follow U.S. rules, and amounts must be translated into U.S. dollars. The profit reported on your Japanese return may therefore require adjustments.
If you converted your home to rental use, review its acquisition cost, value at conversion, and allocation between land and building. Land is not depreciable.
Rental losses are also subject to limitations and may not be fully deductible against salary or other income.
Reference: IRS — Publication 527: Residential Rental Property
3. Review Japanese Income Taxes
Foreign tax credits and other applicable provisions may help address double taxation. Eligibility requirements and limitations apply, so Japanese taxes may not be creditable in full.
Reference: IRS — Publication 514: Foreign Tax Credit for Individuals
4. Separate Property Reporting from Account Reporting
Japanese real estate held directly by an individual is generally not reportable on FBAR or Form 8938. However, the Japanese bank account receiving rent may be reportable if the applicable requirements are met.
Ownership through a corporation or another entity requires a separate review of the interest in that entity.
Reference: IRS — Comparison of Form 8938 and FBAR Requirements
Information to Gather
- Property location, ownership, and ownership percentages
- Acquisition date and cost, including land and building allocations
- Rental start date and periods of personal use
- Annual rental income and expenses
- Loan interest and principal repayment details
- Japanese tax filings and payments
- U.S. arrival and departure dates
We review rental income reporting and related financial account reporting separately. Please provide only an overview in your initial inquiry. We will explain how to share confidential documents separately.
This answer primarily addresses U.S. federal taxation. Different rules may apply to nonresidents, arrival or departure years, and entity ownership. State taxes require separate review.
Information reviewed: October 14, 2026
