👋Who is a Foreign Seller?
A Foreign Seller is any individual or entity that is not considered a U.S. person for tax purposes and is selling a U.S. real property interest (USRPI).
These are the primary clients we represent at FIRPTA Refunds.
In most cases, a Foreign Seller is:
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A nonresident alien individual selling U.S. real estate
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A foreign corporation, partnership, trust, or estate disposing of U.S. property
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Someone who does not meet IRS residency tests (such as the Green Card Test or Substantial Presence Test)
🧾 Key Characteristics of a Foreign Seller
A Foreign Seller generally:
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Is not a U.S. citizen
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Does not hold a valid U.S. Green Card
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Does not meet the IRS Substantial Presence Test (based on time spent in the U.S.)
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Has not elected under IRC §897(i) to be treated as a U.S. entity for FIRPTA purposes
⚠️ Why This Matters
If you are classified as a Foreign Seller, your transaction is subject to FIRPTA withholding rules, which can result in:
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10%–15% withholding of the gross sales price
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Mandatory filing requirements with the IRS
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Potential delays in recovering excess funds
Proper structuring and filing can significantly reduce withholding and accelerate refunds.