When it comes to FIRPTA, the foreign seller has an option to remit the funds or apply for a reduced withholding amount. This will depend on certain variables such as how much you’re selling the property, whether you have a gain or a loss. To find out which option is best for you, you can use our FIRPTA Calculator and schedule a call with our FIRPTA Agents.
When it comes to FIRPTA, the IRS makes the buyer the withholding agent. The buyer will be responsible to withhold up-to 15% of the selling price and send it to the IRS within a certain time frame. If the buyer doesn’t withhold, then they may be held liable for the tax plus penalties and interest. If the buyer is planning to reside in the property they can sign an affidavit, under penalty of perjury, that their intent is for them or a family member to occupy the property at least 50% of the number of days the property is occupied by any one person. This must be their intent for each of the first two 12-month periods after closing. Also, the buyer must purchase the property in their personal name.