Selling your US Property FIRPTA TAX VARIOUS FORMS

Selling your US Property FIRPTA TAX VARIOUS FORMS

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CLAIM BACK YOUR FIRPTA TAX WITHHOLDING ON FORM 8288A WITHIN 4 YEARS OF THE SALE OF YOUR USA-BASED PROPERTY. DON’T MISS IT.

Want to know how much you can save with tax savings using Form 8288A? We have the answers, and a whole lot more.

What is FIRPTA?

FIRPTA stands for (Foreign Investment in Real Property Tax Act).

Foreign Investment in Real Property Tax Act (FIRPTA) was established as withholding of an estimated amount of taxes that may be due on the gain from the disposition or transfer of a U.S. real property interest from a foreign person.

This tax withholding is applicable when a non-US citizen or any foreign person sells is America based real estate property, when the USA property is sold to a foreign person the gross sale proceeds amount is subject to the FIRPTA TAX withholding at the rate reduced rate 10% or at the maximum 15% of the gross sale proceeds by the US Escrow/Selling agent. or held in escrow whilst an application for reduced FIRPTA withholding is timely filed and processed.

Who’s responsible for FIRPTA withholding on the sale of U.S. property?

When a US-based individual or corporation purchases U.S. real property from a foreign individual or corporation then the obligation falls on the buyer or the purchase to ensure that the seller pays 10% (reduced tax if applicable) or 15% of taxes due on the property.  The buyer must execute or have executed the correct forms including the seller’s name, address, and social security number or individual taxpayer identification number.  

If the buyer fails to comply with the withholding and the seller is a foreign entity who fails to pay their tax then 15% will be taken from the purchaser.

Most buyers are unaware that it is their responsibility to determine if the transferor/seller is a foreign person and subject to FIRPTA withholding.

What are the various Forms used in connection with FIRPTA?

FORM 8288 – U.S Withholding Tax Return for Dispositions by Foreign Persons of U.S Real Property Interests.

FORM 8288A – Statement of Withholding on Dispositions by Foreign Persons of U.S Real Property Interests.

Here are more details on the FIRPTA process in the below video

If you have sold your USA property and need assistance in completing form  Form W-7 for an ITIN application or to reclaim the FIRPTA tax. Our team can assist. We are one of the IRS-approved Certified Acceptance Agents (CAA) with many years of experience dealing with ITIN office and FIRPTA work. 

Please visit our website for FAQ related to ITIN and US Tax Assistance.

Our team specializes in international expatriate U.S. personal tax return services. If you need assistance with US 1040 filing for refund claim/FATCA Compliance work/FBAR FINCEN114 Filing, ITIN/ Form W7 Application/EIN/Form W8BENE or CAA services/1040NR U.S. tax filing for refund claim of excess 1042S / 8288A/ 8805/ W2/ 1099. We are happy to assist our clients in a timely, efficient, and cost-effective way

Click here to contact us if you have any queries

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Find out how to apply for a US Individual Tax Identification Number, or ITIN. Also be sure to find out the necessary steps you have to follow when sending a tax return with your ITIN application.

We are happy to assist our clients in a timely, efficient, & cost-effective way

We are one of the IRS Enrolled Agents with many years of experience in US 1040/1040NR personal tax compliance reporting and FATCA Compliance FBAR Reporting.

We are also IRS Approved Certified Acceptance Agent [CAA] with many years of experience dealing with types of ITIN Form W7 application and passport certification processes for US TAX ID.