FIRPTA Withholding Certificate Application

FIRPTA Withholding Certificate Application

The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to the 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. The FIRPTA requires the withholding agent to withholding 15% of the sale proceeds as withholding tax for the IRS.

In most cases, the transferee/buyer is the withholding agent. If you are the transferee/buyer, you must find out if the transferor is a foreign person. If a transferor is a foreign person and you fail to withhold, you may be held liable for the tax. For cases in which a U.S. business entity such as a corporation or partnership disposes of a U.S. real property interest, the business entity itself is the withholding agent.

If you’d like to learn more about how we help non-resident sellers to avoid or withhold less from the sales proceeds from the disposition of the real property, please call us to get a Free Consultation, or contact us here.