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Realtors, Get Ahead: How Mastering FIRPTA Refunds Can Close More Deals
Mastering FIRPTA refunds can help you close more deals and build client trust. Learn how this often-overlooked tax detail can set you apart.
FIRPTA Refund FAQs
Got questions about your FIRPTA refund?
Find quick answers to the most common questions about the process, fees, and timelines.
What is FIRPTA?
FIRPTA, or the Foreign Investment in Real Property Tax Act of 1980, is a U.S. law that mandates tax withholding on the sale of U.S. real estate by foreign sellers. While often mistaken for a tax, FIRPTA is actually a withholding mechanism created by the Internal Revenue Service of the United States (IRS) to ensure that foreign individuals and entities meet their tax obligations on any gain from the sale.
Who is responsible for withholding under FIRPTA?
The buyer of a U.S. real estate property from a foreign seller is responsible for withholding 15% of the property's gross sale price at closing. This amount must then be submitted to the IRS in compliance with FIRPTA regulations.
Who is considered a foreign seller under FIRPTA?
The buyer of a U.S. real estate property from a foreign seller is responsible for withholding 15% of the property's gross sale price at closing. This amount must then be submitted to the IRS in compliance with FIRPTA regulations.
What if the seller is not a foreign person?
If the seller is not a foreign person, they can provide the buyer with a Certification of Non-Foreign Status. This certification confirms their exemption from FIRPTA withholding, and the buyer must retain it for their records.