FIRPTA


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FIRPTA

Description: <p><b>FIRPTA</b>, or the Foreign Investment in Real Property Tax Act, is a federal law created to make sure income taxes are collected when real estate is sold.</p> <p>Purchasers are required to hold back 10 percent of the property sales price unless one of the following is true:</p> <br /><br /> 1. The IRS is requested to calculate the exact amount of taxes that would be due. If this is done, then only that amount will be withheld. <br /><br /> 2. The buyer is using the property as their primary residence and the home sale price is less than $300,000.<br /><br /> Buyers must report the witholding on IRS Form 8288 or 8288-A, and they must pay the withholding within 20 days after buying the home. If they don't withold the money from the purchase, the buyer may be liable for the taxes themselves! To avoid this situation, nearly all real estate transactions now have the seller sign an affidavit stating that they are not a foreign person. This is known as a FIRPTA affidavit. <br /><br /> More information about witholding can be found at the <a href="http://www.irs.gov" >IRS website</a>. Specific Information from the IRS can be found here: <a href="http://www.irs.gov/businesses/small/international/article/0,,id=105000,00.html">FIRPTA IRS Real Estate Info</a>



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