Selling US property as a non resident
When selling a US property as a non resident there are multiple parties involved in the transaction. These can include:
- Attorney - prepares the sale paperwork
- Title Agent - prepares the sale paperwork (if an attorney is not involved)
- Realtor - on the buyers side
- CPA - prepares the 8288 withholding forms (for foreign sellers disposing of US property)
- Certified Acceptance Agent (if requiring an ITIN)
Where the seller is not American there are additional forms prepared - These are called FIRPTA tax withholding forms - collectivel these are Forms 8288, 8288-A and 8288-B. These forms are required for dispositions by a foreign person of US real estate property interests.
The forms must include the US TIN (taxpayer identification number) for the transferee and the transferor (foreign person requiring an ITIN) on both of the forms.
The forms are filed as a result of Section 1445, where U.S. 15% real estate sale price withholding tax is applied to non residents of the US (also known as Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding).
This tax withholding requirement is placed on the buyer to ensure the foreign seller pays the correct US tax to the IRS.
Applying for an ITIN for a US Property sale:
A Certified Acceptance Agent (CAA) can certify identity documents, process Form W-7 and submit all supporting documentation to the ITIN office. Just Breve have assisted multiple foreign sellers with this process. We liaise with your US agents and their timelines for completion:
What is submitted with the ITIN:
- Where withholding is occurring - Form W-7 with supporting documentation and a photocopy of Form 8288 and 8288-A
- Where an exception to withholding is occurring - Form W-7 with supporting documentation and a photocopy of Form 8288-B
Where reduced withholding is rejected, the ITIN is also rejected. We then have to resend the application with the letter from the FIRPTA Unit - Letter 3793 SC/CG and re-apply for the ITIN.
Supporting documentation also includes a copy of the sale contract (and occasionally the purchase contract).
Just Breve charge FIXED FEES which include dealing with any IRS correspondence. Get in touch today by phone and email for a free consultation.
A Certified Acceptance Agent (CAA) can assist you in obtaining the correct TIN.
Just Breve are part of the ITIN Acceptance Agent Program. As a Certifying Acceptance Agent (CAA), we are authorised by the Internal Revenue Service (IRS) to assist alien individuals and other foreign persons with obtaining ITINs from the IRS by validating the person’s foreign status and identity.
I think I need an ITIN: Please visit here
Don't live in the U.K? No problem, we can assist by phone, email and Skype. Please feel free to get in touch.