FIRPTA in New York: Frequently Asked Questions - Natalia A. Sishodia
Note sull'episodio
From Sishodia PLLC - FIRPTA in New York: Frequently Asked Questions breaks down how the Foreign Investment in Real Property Tax Act can affect New York City real estate transactions involving foreign sellers, buyers, and U.S. real property interests. This episode explains why FIRPTA matters in Manhattan, Brooklyn, and across the U.S., especially when a foreign person, foreign corporation, partnership, trust, estate, or U.S. Real Property Holding Corporation is involved in selling a condo, commercial building, or other property.
The discussion covers who counts as a “foreign person” under IRS rules, why citizenship, green card status, tax residency, and entity structure matter, and when the standard 15% withholding requirement applies. It also explores buyer responsibilities at closing, including the obligation to withhold funds, submit IRS Forms 8288 and 8288-A, and meet the 20-day deadline to avoid IRS penalties, interest, or unexpected tax responsibility.
Listeners will also learn about FIRPTA exemptions and reduction options, including the $300,000 personal residence rule, 10% withholding for certain properties under $1 million, Form 8288-B withholding certificates, Form 843 refund requests, Form 1040-NR nonresident tax returns, ITIN requirements, and the role of escrow while waiting for IRS approval. The episode also explains how FIRPTA interacts with New York State’s non-resident seller tax, New York Tax Law § 663, Form IT-2663, IRC § 121, and principal residence considerations.
The episode closes by looking at more complex scenarios, including 1031 exchanges, qualified intermediaries, taxable boot, simultaneous exchange structures, gifts, inheritances, tax treaties, and sales involving foreign-owned property interests. For buyers and foreign sellers preparing for a New York real estate closing, Sishodia PLLC offers guidance on documentation, withholding, IRS forms, state tax obligations, and transaction planning so FIRPTA issues are handled before they create delays.
Sishodia PLLC
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(833) 616-4646