Note: The tax rate increased from 10 percent to 15 percent in December of 2015.
Hi.
My name is Cindy, and I work for the Internal Revenue Service.
Here's some information about purchasing real estate
in the United States from a foreign owner.
People from all over the world invest in United States
real estate.
If you're buying property
from a foreign owner, here are some things
you need to know.
The Foreign Investment in
Real Property Tax Act of 1980, also known as FIRPTA,
may apply to your purchase.
FIRPTA is a tax law
that imposes U.S. income tax on foreign persons selling
U.S. real estate.
Under FIRPTA, if you buy U.S. real estate
from a foreign person, you may be required to withhold 10% of the amount realized
from the sale.
The amount realized is normally the purchase price.
The withholding
is how we collect U.S. tax owed by foreign sellers.
Here's how FIRPTA works.
If the law applies
to your purchase, then within 20 days of the sale, you are required to file
Form 8288 with the IRS.
Along with the form,
you submit 10% withholding.
It is important
to know about FIRPTA, because if you do not withhold the required amount, file the form on time,
and submit the withholding, penalties do apply.
There are some exceptions.
For example,
FIRPTA law does not apply if you are buying a residence for $300,000 or less or the property is not
a U.S. real property interest.
To learn more about FIRPTA, including whether the law applies to your purchase, visit www.irs.gov and type FIRPTA
into the search field.
You can also get a copy
of Form 8288 on IRS site at the Forms and Publication page.
The forms come
with instructions.
Note: The tax rate increased from 10 percent to 15 percent in December of 2015.
Hi.
My name is Cindy, and I work for
the Internal Revenue Service.
Here's some information
about purchasing real estate
in the United States
from a foreign owner.
People from all over the world
invest in United States
real estate.
If you're buying property
from a foreign owner,
here are some things
you need to know.
The Foreign Investment in
Real Property Tax Act of 1980,
also known as FIRPTA,
may apply to your purchase.
FIRPTA is a tax law
that imposes U.S. income tax
on foreign persons selling
U.S. real estate.
Under FIRPTA,
if you buy U.S. real estate
from a foreign person,
you may be required to withhold
10% of the amount realized
from the sale.
The amount realized is normally
the purchase price.
The withholding
is how we collect U.S. tax owed
by foreign sellers.
Here's how FIRPTA works.
If the law applies
to your purchase,
then within 20 days of the sale,
you are required to file
Form 8288 with the IRS.
Along with the form,
you submit 10% withholding.
It is important
to know about FIRPTA,
because if you do not withhold
the required amount,
file the form on time,
and submit the withholding,
penalties do apply.
There are some exceptions.
For example,
FIRPTA law does not apply
if you are buying a residence
for $300,000 or less
or the property is not
a U.S. real property interest.
To learn more about FIRPTA,
including whether the law
applies to your purchase,
visit www.irs.gov
and type FIRPTA
into the search field.
You can also get a copy
of Form 8288 on IRS site
at the Forms and Publication
page.
The forms come
with instructions.