Estimate the federal FIRPTA withholding due when the seller is a foreign person â with the primary-residence exemption tiers built in.
The Foreign Investment in Real Property Tax Act (FIRPTA) requires the buyer to withhold federal tax when the seller is a foreign person. The default rate is 15% of the amount realized. It drops to 10% when the buyer will use the property as a primary residence and the price is between $300,000 and $1,000,000, and to 0% at or below $300,000 with a qualifying primary-residence use.
FIRPTA is nuanced and the IRS rules control. Atlantic Title Firm coordinates FIRPTA withholding and documentation at closing — always confirm specifics with your CPA or attorney.
Generally 15% of the amount realized. It can drop to 10% or 0% under the buyer primary-residence price tiers ($300kâ$1M, or $300k or less).
The buyer (transferee) is legally responsible for withholding and remitting it to the IRS, typically handled through the closing agent.
No. This is a planning estimate only. FIRPTA outcomes depend on IRS rules and the seller's status â consult a CPA or attorney.
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