NON-US CITIZENS SELLING US-BASED PROPERTY DIFFERENCE BETWEEN FORM FORM 8288A and Form 8288B
What is FIRPTA TAX?
Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding. FIRPTA authorized the United States to tax foreign persons on dispositions of U.S. real property interests.
A disposition means “disposition” for any purpose of the Internal Revenue Code. This includes but is not limited
- Sale or purchase agreement for the land of house/commercial unit
- Exchange of contract,
- Transfer of property
- Liquidation
- Redemption,
- gift, transfers, etc.
Who is Subject to FIRPTA TAX?
Persons purchasing U.S. real property interests (transferees) from foreign persons [For example Singapore citizen or United Kingdom-based citizen or any other foreign country other than American passports],
Its mandatory for the purchasers’ agents, and settlement officers are required to withhold Federal FIRPTA TAXES at 15% (10% for dispositions before February 17, 2016) of the amount realized on the disposition (special rules for foreign corporations).
What is the difference between Form 8288 – A and Form 8288 -B?
Form 8288 A – Issued after the sale or disposition of USA property with completed details of the sale price, Federal tax withholding, date of sale, address of the property, withholding escrow agent’s name. The 10% or the 15% tax on sale proceeds are reported on this form.
Form 8288 B – Prepared and submitted by the purchaser or seller 3 months before the sale or closing of the contract of sale to the IRS with a request for the reduced tax or exemption from FIRPTA tax withholding.
For more information on FIRPTA
Please note to submit both Form 8288 B and reclaim the federal withheld on Form 8288A having a valid US TAX ID or ITIN is mandatory, if not you can reclaim the excess tax or get approval for valid exemption of tax
We are one of the IRS-approved Certified Acceptance Agents CAA with many years of experience dealing with IRS ITIN applications and Federal tax return refund claims. If you are looking for expert advisory tax reclaim or ITIN application service with passport certification and to ensure ITIN is approved with a 100% success rate reach out to US via our website with the service required.
