THE BASICS

When a foreign owner gets ready to sell, they could be subject to a 10% or 15% (of the sales price) withholding unless the transaction is exempt from FIRPTA.  This calculation is handled automatically on our Seller Net Sheet free tool Most common exemption: The sales price is $300,000 or less. The Buyer or a member of the family must have plans to reside at the property for at least 50% of the number of days the property is used by any person during each of the first two twelve month periods after sale.

MOST COMMON EXCEPTION

Seller provides a Certificate showing they are not a foreign seller. Seller receives a withholding certificate from the IRS excusing withholding. Seller must apply for said exemptions prior to close of escrow.

OTHER POSSIBLE EXCEPTIONS

Seller provides a Certificate showing they are not a foreign seller. Seller receives a withholding certificate from the IRS excusing withholding. Seller must apply for said exemptions prior to close of escrow.

FUNDING

All funds deposited in escrow must be by wire transfer. Outside of US Wire Transfers/Swift Fee: International transfers are executed through SWIFT –– Society for Worldwide Interbank Financial Telecommunication. There is an additional charge for this type of transfer. Typically, the charge is a flat rate and does not exceed $50. The charge is deducted from the wired funds and varies from bank to bank.

Forms that may need to be completed by the Seller are available at www.IRS.gov or by clicking on the corresponding form number below:

  • W-7, Application for IRS individual taxpayer identification number.
  • 8288, U.S. withholding tax return for dispositions by foreign persons of U.S. real property.
  • 8289-A, Statement of withholding on disposition by foreign persons.
  • 8288-B, Application for withholding certificate for dispositions by foreign persons of U.S. real property interests

  :  8461 Lake Worth Rd #210 Lake Worth FL 33467
  :  (561) 340-1414
  :  info@americantitlecorp.net
  :  (800) 434-9001 

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