IRS withholding amounts under FIRPTA ( Foreign Investment in Real Estate Property Tax Act) have increased. If a seller of United States real property is a “foreign person” as defined by FIRPTA, the IRS requires the buyers of the property to withhold up to 15% of the amount realized by the seller on the transfer and remit the withheld amount to the IRS. There are exemptions to this. A withholding certificate from the IRS can reduce the amount of withholding. Due to the complexity and potential risk of FIRPTA, buyers and sellers should seek legal and tax advice regarding compliance.
Your REALTOR® will be able to provide you with names of experts in the area.
