Why You Should Plan Ahead When It Comes To FIRPTA (1)

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Why You Should Plan Ahead When It Comes To FIRPTA
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• The Foreign Investment in Real Property Tax Act,
  better known as FIRPTA, has been put in place to
  make sure that foreigners owning real estate
  property in the U.S. complete and file the
  appropriate tax documentation in respect to the
  sale or transfer of that property.
• When a foreigner sells or transfers real estate
  here in America, there are various process and
  procedures outlined by the IRS that they must go
  through in order to be compliant with their tax
  requirements. When a foreign person works with a
  professional tax service provider, they may be
  able to reduce the tax impact, but its important
  to reach out to them in plenty of time.
• For anyone who is new to FIRPTA, heres why
  advance planning is so crucial

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• Why you should always plan ahead for FIRPTA
• Throughout the US, the buyer is generally in the
  most dominant position when it comes to real
  estate transactions, and at almost every point in
  the buying process, they are able to walk away
  from the deal. When FIRPTA plays a part, because
  a withholding certificate must be secured, this
  can delay the sale significantly.
• As a seller, to avoid the buyer backing out of
  the sale because its taking so long to obtain
  the necessary certificates, or because of a
  change in market conditions, you should try to
  obtain the withholding certificate as soon as
  possible. One way of expediting the entire
  process, is to work with a professional
  accountancy firm who offer assistance with FIRPTA.

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• What is a FIRPTA Withholding Certificate?
• This certificate is used to minimize the amount
  of the sale price that is withheld, and without
  one even though the capital gains on certain
  sales may be zero the US government will
  require a percentage of the sale price to be
  withheld.
• How can you avoid a percentage withholding?
• By filing an IRS form 8288-B, the transfer can
  apply for a withholding certificate to avoid a
  percentage withholding. Should the IRS accept the
  form, then the withholding no longer applies and
  will be reduced or eliminated.

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• If the form is accepted by the IRS, then the
  standard 15 withholding does not apply, and
  withholding based on the transfer or sale of the
  property will be reduced or eliminated.
• Why is it so important to plan ahead and file
  Form 8288-B in a timely manner?
• Even before the global pandemic struck, the IRS
  were often taking more than 90 days to process
  the 8288-B request, and should the certificate be
  issued before the property has been transferred,
  no withholding is required.

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• Still sound a little too complex or confusing?
  Dont worry, help is at hand. When it comes to
  issues surrounding FIRPTA, it often makes sense
  to enlist the help of a professional tax firm who
  are experienced at dealing with such matters, and
  not only can this speed things up for you, but it
  guarantees that you limit your tax commitments by
  as much as is legally possible.

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• At Heyer Associates, we proactively assist our
  individual and small business clients in meeting
  their goals. Our key area of focus is ensuring
  that our clients remain compliant with federal
  and state tax laws by providing them with high
  quality accounting and tax services Miami. If you
  are looking for individual accountant in Miami,
  Heyer Associates would be a right option.