Orlando Real Estate -


August 22nd, 2013 3:38 PM by Karyn Smith

Many people  are under the impression that FRIPTA is a tax, when, in reality, it is a withholding in the event of a tax liability – think of it more as cash flow than cash payment.


The Foreign Investment in Real Property Tax Act (FIRPTA) requires that non-residents selling US property are subject to withholding of 10% of the gross sale price. This withholding is retained until the appropriate paperwork is filed  has been processed by the IRS . If there is no capital gain due on the sale of a US property, then the seller receives a full refund of their 10% withholding. Otherwise, where gain is calculated, the IRS retains the tax element and refunds the balance to the sellers.


The timing of the filing is critical – the application must be submitted to the IRS on or before the closing date otherwise it is deemed late and the 10% must be submitted to the IRS.

Posted in:General
Posted by Karyn Smith on August 22nd, 2013 3:38 PM


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