Page 2 - The Panozzo Team - International Real Estate Guide

FIRPTA –– Does This Apply to You?

Foreign Investment in Real Property Tax Act
FIRPTA is a U.S. law governing the sale of real property by non-resident aliens and foreign entities
when the property is located within the United States.

Is Seller a US Citizen YES
or a US Resident? Complete Certification of

Non-Foreign Status

NO Is Seller YES
recognizing a gain
of more than 10%? • See your CPA or tax attorney
regarding application form 8288B
for an IRS Withholding Certificate
• Carefully review FIRPTA
Withholding Agreement. All
parties, including seller’s tax
professional, must sign this
agreement.
• Escrow provides an estimated
Does the Buyer have Seller Statement
definite plans to use
the property as his No
residence and sales
does not exceed Buyer Requests 10%
$300,000? Withholding

If so instructed, Escrow will withhold 15% pending receipt of Withholding Certificate.
YES
Complete Buyer’s Internal Revenue Code Provides: Withholding is not required if the Buyer acquires the property for
use as a home and the sales price is not more than $300,000. The Buyer or a member of their family
Declaration for must have definite plans to reside at the property for at least 50% of the number of days the
$300,000 Residence property is used by any person during each of the first two 12 month periods following the date of
Exception form transfer. When counting the number of days the property is used, do not count the days the property
will be vacant.

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