The Foreign Investment in Real Property Tax Act (FIRPTA) of 1980 authorizes the United States to tax foreign persons who are non-resident aliens selling U.S. real property interests. In California, understanding this act can be helpful for professionals in the industry.
The IRS provides a comprehensive, yet concise, summary of the act, and includes the following information. You’ll never have a question again!
- Real property interest
- Rates of withholding
- Exceptions from FIRPTA withholding (include the home use/$300,000 exception and IRS withholding certificate)
- Reporting and paying tax on U.S. real property interests
- Format for applications
- Road map to regulations
- Definitions of terms and procedures unique to FIRPTA