Regulations & Compliance

Can I earn rental income without work authorization?

I’m an international student without a work authorization. I’m however allowed to have passive income from renting out equipment. Can I start a rental business while studying?

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  1. 8 Answers

    First and foremost, the caveat to this answer is assuming you are legally in the United States on a F-1 Visa. F-1 Visa students may not work off-campus during the first academic year but may accept on -campus employment subject to certain conditions and restrictions, and generally are allowed to work up to 20 hours per week. On-campus employment must be in a place that provides services to students on campus, such as a school cafeteria, school coffee shop or school book store. After the first academic year is complete, F-1 Visa students can seek off-campus employment through a variety of programs. See the below USCIS.gov link for further information.

    An F-1 Visa student, generally speaking, would not be able to start their own business in the United States where that student actively engages in managing the business, works in the business operations, and receives an income for that management and work. This would be considered unauthorized employment and would be a violation of the F-1 Visa status if he/she did not have authorization to perform these services.

    However, your scenario pertains to “passive income”. The IRS defines two “passive activities” in Publication 925: 1) trade or business activities in which you don’t materially participate during the year and 2) rental activities, even if you do materially participate in them, unless you’re a real estate professional.

    If an F-1 Visa student invested in real estate or equipment and received monthly rental income from that property, that would likely be considered passive income and not be considered employment in violation of his/her F-1 Visa status. For IRS purposes, rental income is typically considered passive income or a passive activity. For F-1 Visa compliance, a third-party management company might be considered and hired to manage the property rental.

    Some resources you might find helpful:

    https://www.uscis.gov/i-9-central/complete-correct-form-i-9/complete-section-1-employee-information-and-attestation/foreign-academic-students

    https://www.irs.gov/pub/irs-pdf/p925.pdf

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