Many FIRPTA problems are not caused by the transaction itself. They are caused by waiting too long to address FIRPTA requirements.

One of the most misunderstood areas of FIRPTA compliance involves whether withholding funds must always be immediately remitted to the IRS at closing. In many real estate transactions involving foreign sellers, buyers and settlement agents assume the full FIRPTA withholding amount must automatically be sent to the IRS within 20 days after closing. While that is often true under standard FIRPTA procedures, there is also an important exception that may allow withholding funds t

Recent IRS procedures and federal electronic payment initiatives are increasingly moving FIRPTA withholding remittances toward electronic payment through the Electronic Federal Tax Payment System (EFTPS), particularly for settlement agents, title companies, and repeat filers handling FIRPTA transactions. This payment method requires advance preparation by the closing or settlement agent responsible for remitting the withholding, including EFTPS enrollment, payment scheduling,

FIRPTA issues involving LLC ownership structures can sometimes create confusion during real estate transactions. Many buyers and closing agents assume that purchasing property from a U.S. LLC automatically avoids FIRPTA withholding requirements. That assumption is not always correct. In some cases, the underlying ownership of the LLC may still involve foreign persons or foreign-owned entities that can trigger FIRPTA considerations. The analysis may depend on factors such as:

In some real estate transactions, FIRPTA issues are not identified until after closing has already occurred. This can create significant complications for buyers, sellers, attorneys, and settlement agents. Under FIRPTA, buyers are generally responsible for ensuring that required withholding is properly handled and remitted to the IRS when purchasing U.S. real estate from a foreign seller. If FIRPTA withholding was overlooked or underpaid, potential issues may include: unpaid

Many foreign sellers are surprised to learn that FIRPTA withholding may potentially be reduced before closing through a properly prepared withholding certificate application. Under FIRPTA, buyers are generally required to withhold a percentage of the gross sales price when purchasing U.S. real estate from a foreign seller. However, the withholding amount is not always the seller’s actual U.S. tax liability. In some situations, the seller’s final tax obligation may ultimately

The Foreign Investment in Real Property Tax Act (FIRPTA) was created by the U.S. Congress in 1980 to insure that Buyer's in the...

This is the first of the 3 phases of a typical FIRPTA transaction. The IRS under FIRPTA requires Buyer's to withhold 10 to 15% from the...

Section 1445 of the Internal Revenue Code (“IRC”) [a/k/a 26 C.F.R. § 1.1445 and/or Treas. Reg. § 1.1445] provides that the Buyer(s)...

IRS Statute of Limitations are Strict. Periods of limitation on filing claims for refunds with the IRS are strictly delineated in the IRS...

The Foreign Investment in U.S. Real Property Tax Act of 1980 Empowered by the Debt Reduction Act of 1984 and modified by the Path Act in...

The Foreign Investment in U.S. Real Property Tax Act of 1980 Prior to 1980 no FIRPTA withholding or tax on Foreigners selling US...

The IRS holds the Buyer/ Payor 100% liable for the full 15% of gross sale or distribution FIRPTA withholding, remitting these Seller /...

Beware of granting exceptions! The IRS holds the Buyer/Payor and Agents liable! Buyers of property where the sale price is $300,000 or...

The 3 simple logic questions behind calculating FIRPTA withholding. Click here for the 3 simple logic questions behind calculating FIRPTA...

A. Who Must File If you are any of the following, you must file a return: A nonresident alien individual engaged or considered to be...

US Real Property Interests and US Real Property Holding Company USRPI = U.S. Real Property Interest includes more than a direct interest...

It is important to test every FIRPTA disposition for ECI income and deductions and know how to report it to the IRS or suffer an audit...

Fixed, Determinable, Annual, or Periodical Income (FDAP) It is important to test every FIRPTA disposition for FDAP income which is a form...

We handle Seller cases subject to FIRPTA and Buyer cases verifying exception requests. WE SERVE: Buyers, Foreign Sellers, Foreign...