Fort Lauderdale IRS Tax Rules Buying A House From A Foreigner

The Internal Revenue Service (IRS) Has additional rules that have to be followed whenever someone buys real property in the U.S. from a seller who is not a U.S. citizen or permanent resident or a foreign corporation or foreign LLC.

It is the buyer's responsibility to comply with the IRS tax code when buying real property in the U.S. from a foreigner. The buyer must comply with the Foreign Investment in Real Property Tax Act of 1980 commonly known as FIRPTA. FIRPTA requires the buyer to withhold a percentage of the sales proceeds for the seller and send it to the IRS.

The main purpose of FIRPTA is to prevent foreigners from potentially avoiding paying tax on the gain on the sale of real property by not filing a tax return. By requiring the buyer to withhold proceeds from the sale of real property property, the foreign seller is forced to file a tax return in order to recoup any of the proceeds withheld at closing.

If you are in the process of buying real property from a foreigner and need assistance complying with Foreign Investment in Real Property Tax Act of 1980 feel free to contact our Fort Lauderdale office. We can assist you regardless of where the transaction takes place in the U.S.

Our fee for preparing the documents needed is $575.00.  (954) 519 2528, or leave a message by clicking "REQUEST A QUOTE" orange button.

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John Folson, CPA, LLC, 1314 E. Las Olas Blvd #1104, Fort Lauderdale, FL 33301
Phone: (954) 519-2528 | Fax: (866) 243-4101 | Email: cpa@lauderdaleirscpa.com
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