Mortgage Help   Mortgage Rates Real Estate Credit Foreclosure Tax
	Tax FIRPTA. Foreign Investment in Real Property Tax Act.   Property Taxation: Depreciation Taxation of Profit Adjusted Basis Home Mortgage Interest and Points Deduction   1031 EXCHANGES Capital Gains Tax Corporate Tax Corporation Dividend Tax Double Taxation European Union Savings Taxation Homeowners exemption Foreign Investment in Real Property Tax Act. Flat Tax Principles of Income Tax Income taxes Inheritance Tax Installment Sales Poll Tax Progressive Tax Property taxes California Propositions Purposes and Effects of Taxation Retirement Tax Sales Tax Sales leaseback Tariff Tax Credit, Exemption Equivalent and Tax Tax Rates Tax Treaty Direct and Indirect Taxation Value Added Tax It became law in January 1985.  FIRPTA requires buyer to withhold estimated taxes equal to 10 percent of the sales price in transactions involving real property in the United States sold or exchanges by a foreign person. The 10% estimated withholding must be reported and paid to the Internal Revenue Service within 10 days after the close of escrow. If the buyer fails to withhold the estimated taxed and the seller fails to pay on the sale, the buyer is subject to a penalty equal to 10% of the purchase price or the seller's actual tax liabilities plus interest and penalties, whichever is less. For personal residence, FIRPTA applies only to sales price of $300,000 or more. When a buyer signs an affidavit stating that he or she plans to use the property as a personal residence and the purchase price is less than $300,000 the buyer is relived of withholding estimated taxes. All other property-investment, rental, commercial, land,… requires withholding when a foreign person sells the property. If foreign person own a 2- unit apartment and sells it for $600,000, a $60,000 will have to be withholding for the federal government. If more than one person owns the property and some are U.S citizen and some are foreign, the amount of withholding must be prorated on the basis of the capital invested. If husband and wife own property and one spouse is a citizen and the other is not, withholding will be prorated 50/50.