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Understanding FIRPTA Requirements Business Articles | January 5 Nike Air VaporMax Flyknit Cool Grey Orange Sale , 2012
The Foreign Investment in Real Property Tax Act (FIRPTA) of 1980 is an important tax law for all United States real estate property purchasers to understand, particularly if you are a foreign real...

The Foreign Investment in Real Property Tax Act (FIRPTA) of 1980 is an important tax law for all United States real estate property purchasers to understand, particularly if you are a foreign real estate investor. This Internal Revenue Service (IRS) tax law requires that 10% of the total amount realized by the foreign real estate seller on the disposition of the property located in the U.S. is withheld at closing and remitted to the IRS.

The transferee, or the buyer, is actually responsible for the withholding and sending the payment to the IRS Nike Air VaporMax 2.0 Men's White Sale , which is why it is important for both foreign real estate investors and domestic real estate investors to be familiar with and understand the requirements set forth by FIRPTA.

The History Behind FIRPTA

FIRPTA was created to ensure that taxes are paid on real estate that is sold by a foreign real estate investor in the United States. Prior to the passage of FIRPTA, it was possible for foreign real estate investors to purchase real property in the U.S., sell it at a profit, and not pay anything in taxes. This proved to be advantageous to foreign real estate sellers, but not to legal U.S. residents. FIRPTA was created to address this discrepancy and protect real estate property buyers from liability for IRS payments.

The 10% withholding acts as a form of deposit for the seller's property tax liability and is remitted to the IRS immediately after the property closing has taken place. The amount realized is usually the amount paid for the property. If the seller is a foreign corporation the percentage increases to 35% of the gain realized on the sale.

Who Is Required To Pay Under FIRPTA Nike Air Max 270 Flyknit Men's Blue Black Sale , a foreign person is defined as:

? A nonresident alien individual,

? A foreign corporation not treated as a domestic corporation, or

? A foreign partnership, trust or estate.

Resident aliens are not considered foreign persons under FIRPTA.

There are a few instances where the seller may be exempt from FIRPTA; the most common is when the property sale is less than $300,000 and the buyer intends to use the property as his or her primary residence. In this case Nike Air Max 270 Flyknit Olive Flak Men's Sale , FIRPTA does not apply and the 10% does not need to be withheld.

How It Works

Typically, the buyer, realtors and title agency will be informed ahead of time if the seller is a foreign real estate investor and, therefore, subject to FIRPTA requirements. At the property closing Nike Air Max 270 Flyknit Men's White Black Sale , it is the responsibility of the buyer to withhold 10% of the purchase price from the sale and remit it to the IRS. If the funds are not withheld, the buyer and his or her agents may be held responsible for the amount owed.

When a title agency is involved in the transaction the agency can generally take care of verifying the seller's foreign residency and making sure the necessary paperwork is in order an. Cheap Custom Jerseys Cheap NBA Jerseys From China Cheap MLB Jerseys China Cheap Baseball Jerseys Cheap Hockey Jerseys From China Cheap NCAA Jerseys Cheap NHL Hockey Jerseys Cheap Custom Team Jerseys Cheap Custom Hockey Jerseys Free Shipping Cheap Custom Team Jerseys Free Shipping

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