FOREIGN Investors in US Real Property: FIRPTA WITHHOLDING CERTIFICATE


We have previously wrote on FIRPTA here - 

If the amount of the FIRPTA withholding tax (generally 15% of the selling price) will exceed your  “maximum US tax liability”, we can apply to the IRS for a withholding certificate to reduce, or waive, the withholding, down to the maximum US tax liability.

If the application is filed by the day of closing, the closing agent will retain the FIRPTA withholding tax in escrow until the IRS response (the withholding certificate) is received. When the certificate is received, the tax withheld is refunded by the closing agent, in accordance with the instructions in the certificate - i.e most, or all, of the FIRPTA withholding tax is refunded. This process can be completed in about 3 months. Otherwise, under normal procedures, and current IRS restrictions, you could wait a year, or longer, to receive the refund.

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