Services

FIRPTA Services

In the United States, when a foreigner sells a property, they are subject to a FIRPTA Tax. We are dedicated to negotiating with the IRS a reduced tax amount for the seller. At times, that amount can be as low as zero.

FIRPTA Specialist

To do any of these things, it is recommended that you get a specialist from FIRPTA. That’s me. Both options require forms to be filled out. The second option (the most popular option) requires that I look at your profit and loss and contact the title company. I create a table for the IRS and write a package explaining why the seller owes a reduced amount in taxes. This package is sent to the IRS. They process it and write a letter with their decision. If there was no profit, then I contend that no tax is owed. You cannot tax zero. If there was a profit, I negotiated a reduced tax amount. What is paid to the IRS can always be recovered later by refunding a tax return the following year. The ultimate goal is to save the seller as much money as possible.

Taxpayer Identification

ITIN / EIN

One of the FIRPTA requirements is that the Foreign Seller must have a US Taxpayer Identification Number. When the Seller is an individual, this is known as an ITIN. When the Seller is an entity, such as a company, then this is known as an EIN. If the Foreign Seller does not have a Tax ID Number, we can submit an application for them.

FIRPTA Exemptions

No Withholding at Closing

The IRS has allowed for exemptions of FIRPTA under certain circumstances. In the event the Foreign Seller does qualify for an exemption, we submit the proper documentation required to prove FIRPTA Exemption applies.

1040-NR

Tax Returns for Non-Residents

In the event the IRS does ask for FIRPTA Taxes to be paid, we can submit a 1040-NR Tax Return the following Tax Season. In that tax return, we request for the FIRPTA tax that was paid to be returned in the form of a tax refund.

FIRPTA tax

Exceptions

Not everyone needs to pay a FIRPTA tax. The law has allowed some exceptions to the rule. I make sure to go through the exceptions before telling the client yes, it is a full FIRPTA. For an exception, I write an affidavit that must be notarized.