How to get an ITIN number for a home sale in the US
When a non resident alien (NRA) of the US decides to sell a house in the US, they are subject to FIRPTA tax withholding on the sale. The paperwork for FIRPTA requires an ITIN. Where one has never been received or requires renewal, We can assist.
What is FIRPTA?
The Foreign Investment in Real Property Tax Act (FIRPTA) requires that US tax withholding occur on US capital gains. Certain paperwork has to be completed by the US agents and US buyer. This paperwork is the Form 8288 and 8288-A or 8288-B.
I have never had an ITIN why do I need one now?
All non resident sellers of US property are required to file a 1040NR to report the sale of a US real property. However, as many non resident sellers were selling and not paying across the capital gains tax to the US, the IRS implemented FIRPTA.
This means at closing or close to closing, the 8288 forms need to be filed with the IRS to hold the US tax upfront. This is 15% of the gross sales price. There is an exemption to this if the property is worth less than $300,000 and the buyer will be residing in it 50% of the time in the first 24 months.
As part of the filing of the 8288 forms - an ITIN is required to be added or applied for.
FIRPTA rules are strict - and the correct paperwork has to be attached to the ITIN application while simultaneously filing the FIRPTA paperwork. We can assist with this process, as well as liaising with any US agents if you are unclear in terms of the requirements.
What happens when I get my ITIN?
The ITIN unit will communicate with the FIRPTA unit.
Once the FIRPTA unit has your ITIN, they will issue you with the final form 8288-A, which they stamp copy as filed. This form is then attached to any 1040NR tax return being filed as proof of tax withheld. As tax is withheld on the gross sale BUT due on the net sale, you will receive a refund. So do not lose the 8288-A!!
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Just Breve is a Certifying Acceptance agent and can assist with all 1040NR tax return filing requirements and ITIN applications. We help applicants on a daily basis for both new ITIN applications and for ITIN renewals. We charge fixed fees (including up to 2 hours travel time to you).
You also have the choice of visiting us at our office near Heathrow airport (J4b off the M4).
Get in touch today and we will happily assist and answer your questions:
Phone: 0208 1444632