FOREIGN INVESTORS REAL PROPERTY TAX ACT (FIRPTA)

If you are a non-resident and thinking about selling your property, please contact us and we will assist you. FIRPTA withholding can be avoided or decreased by filing, prior to closing, Federal Form 8288-B along with documentation to prove the projected gain or lost on sale. The IRS then determines the actual tax and issues a "withholding certificate" stipulating the correct tax due. As long as the seller can provide a copy of the Form 8288-B to the title company at closing, the 10% withheld funds will be held in escrow from the date of closing until the date of receipt of the "withholding certificate". At that time, the corrected withholding amount will be sent to the IRS an the balance of the escrowed funds will be returned to the seller. If Form 8288-B is not completed prior to closing, the title company is required by law to transmit the withheld funds to the IRS within 20 days of closing. The tax may only be refunded by filing Form 1040NR after December 31 of the year of sale.