Withholding of Tax on Dispositions of U.S. Real Property Interests
International Tax Gap Series
It’s no secret that foreign investors are being courted by U.S. real estate agents and other investment conduits with eye-popping deals to buy real property in the U.S. The combination of a weak U.S. dollar and low interest rates has led to a phenomenal rise in the purchase of a U.S. real property interest by foreign investors. Eventually, these real property interests will be sold; therefore, foreign investors (transferors) and buyers (transferees) need to know their U.S. tax obligations when a disposition occurs.
For more information related to the rules for proper withholding of tax on the dispositions of U.S. Real Property interest, please refer to the IRS FIRPTA Withholding page. It also clarifies who is obligated to conduct the required withholding of tax upon the foreign investor’s disposition of real property interests.
References and Links
- Definitions of terms and procedures unique to FIRPTA
- Foreign Persons Involved in U.S. Real Estate
- Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
- Publication 519, U.S. Tax Guide for Aliens
The International Tax Gap Series