Apply for FIRPTA Withholding Certificate

How to Apply for FIRPTA Withholding Certificate?

If there is a transaction that involves the sale of a property in the USA, it becomes necessary then to follow certain protocols. To start with, under the Foreign Investments in Real Estate Property Act or FIRPTA, the non–resident buyers or sellers have to comply with the specific requirements. FIRPTA, created by IRS, aims to make sure that foreign investors are also contributing their fair share. But it is also a matter of great concern, as the proceeds from the sale are not made available to the seller on an immediate basis.

The only way to overcome the negative repercussions of FIRPTA is to apply for a FIRPTA Withholding Certificate. Being a foreign seller, it becomes necessary to plan ahead if you are keen to obtain the withholding certificate. The certificate is basically an application for a reduced withholding that is based on the actual gain of the sale rather than the selling price. After evaluation, if it is found that you have made no substantial gains, the amount will be released immediately. If the transaction involves gain, the IRS will withhold the maximum gains.

In short, the certificate will let you have the proceeds from the sale at the time of closing.

Why Can You Do To Obtain FIRPTA Withholding Certificate?

To avoid 15% withholding, the best you can do is apply for a Withholding Certificate, for which you can use the IRS form 8288 B. However, this is where you may find the going tough. IRS usually takes more than 90 days to process the 8288-B request. If the certificate is issued before the transfer of property, there is no place for withholding. On the other hand, if the certificate is issued after the transfer of property, it will facilitate the speed of refund, thus benefiting you in the long run.

In any transaction where FIRPTA is involved, the sale is likely to be delayed on account of the withholding certificate. As a seller, you must make it a point to obtain all the necessary certificates just to avoid any last-minute hurdles. There is also the possibility of the buyer leaving the transaction because of the paperwork and documentation.

After evaluating the prevailing circumstances, the ideal thing for you as a seller would be to connect with certified tax and accounting experts. These experts will guide you through the application process to help you maximize the returns on your investment. When you work closely with the experts, they will always make sure to protect your interest.


Need help with FIRPTA Withholding refunds in Florida? If you want to work with the experts, make sure to hire the services of FIRPTA Tax Returns. To know more, you can visit our website.

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