FIRPTA Fact of Fiction

1. I am buying US property from a US citizen who lives in Canada. No withholding is required. TRUE 2. I am a US citizen buying US property from a Canadian. If the withholding obligation is not met, the IRS may charge me a penalty. TRUE 3. I am a French citizen selling property. I… Read more »

FIRPTA WITHHOLDING: THE TITLE COMPANY’S CHALLENGE

The Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) requires withholding on the sale of US real property by a non-US person or entity. The buyer must remit the withheld funds to the IRS within 20 days of the date of closing. There is also an obligation to accurately complete and submit withholding… Read more »

FIRPTA Withholding Certificate Wait Time

The IRS has up to 90 days to process an application for a withholding certificate. The wait time to receive a determination can vary. For applications submitted by our office in January 2018, the average wait time to receive a determination is currently 65 days.

FIRPTA Withholding Early Refund

A nonresident alien selling U.S. real property can apply to the IRS for a withholding certificate, which is a determination that the withholding obligation exceeds the actual tax owed, and the withholding should be reduced or eliminated. The withholding is still required, but the withheld funds do not have to be submitted to the IRS… Read more »

FIRPTA Withholding Percentage

Effective February 16, 2016, if the property is not purchased as a residence for the buyer and/or if the sale price is over $1,000,000, the FIRPTA withholding is 15% of gross sale proceeds. In some situations (primarily in sales by entities) the withholding is 35% of the gain. While the new law does not define… Read more »