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Hello ALTA 😊 

I want to share with you information with you, these are very frequent questions and "myths" or misunderstandings about FIRPTA, hope is helpful; 

FIRPTA: Debunking Myths and Ensuring Compliance

Breakdown of prevalent FIRPTA misconceptions:

Misconception 1: U.S. LLCs Shield Foreign Owners

Forming a U.S. LLC doesn't magically erase FIRPTA obligations. If the LLC's owner is foreign, they are still subject to the tax.

Misconception 2: Multiple Owners, Some U.S. Citizens, Equals No FIRPTA

Even with multiple owners, each seller's share is evaluated independently. A foreign owner's portion is subject to FIRPTA withholding.

Misconception 3: Gifting Property Avoids FIRPTA

Gifting U.S. real estate to a U.S. person triggers gift tax for the foreign donor. A sale, even to a relative, might be a more tax-efficient strategy.

Misconception 4: Unreported Rental Income is Irrelevant

Unreported rental income is a red flag. Catch-up tax returns may be necessary before selling to avoid complications.

Misconception 5: Certain Documents Guarantee Exemption

U.S. driver's licenses, Social Security Numbers, or even expired visas don't automatically exempt foreign sellers from FIRPTA. Tax residency is the key factor.

Misconception 6: FIRPTA Only Applies to Expensive Properties or Developed Land

FIRPTA applies to all sales of U.S. real property interests by foreign persons, regardless of price or property type.

Misconception 7: FIRPTA is the Buyer's Problem

Both buyer and seller have responsibilities under FIRPTA. Both parties cooperation is essential to avoid penalties.

Misconception 8: A U.S. Spouse Makes the Couple Exempt

Only the U.S. spouse's share is exempt. The foreign spouse's portion is subject to FIRPTA withholding.

Key Takeaways:

• FIRPTA is a withholding, not the final tax. Over-withholding can be refunded.
• Proper documentation is key to a smooth transaction
• FIRPTA is complex; seek tax advice from a licensed tax professional expert in FIRPTA matters.
  

Understanding FIRPTA and its nuances is crucial for anyone involved in U.S. real estate deals with foreign sellers. Don't let misconceptions lead to costly mistakes.

Hello ALTA 😊 

I want to share with you information with you, these are very frequent questions and "myths" or misunderstandings about FIRPTA, hope is helpful; 

FIRPTA: Debunking Myths and Ensuring Compliance

Breakdown of prevalent FIRPTA misconceptions:

Misconception 1: U.S. LLCs Shield Foreign Owners

Forming a U.S. LLC doesn't magically erase FIRPTA obligations. If the LLC's owner is foreign, they are still subject to the tax.

Misconception 2: Multiple Owners, Some U.S. Citizens, Equals No FIRPTA

Even with multiple owners, each seller's share is evaluated independently. A foreign owner's portion is subject to FIRPTA withholding.

Misconception 3: Gifting Property Avoids FIRPTA

Gifting U.S. real estate to a U.S. person triggers gift tax for the foreign donor. A sale, even to a relative, might be a more tax-efficient strategy.

Misconception 4: Unreported Rental Income is Irrelevant

Unreported rental income is a red flag. Catch-up tax returns may be necessary before selling to avoid complications.

Misconception 5: Certain Documents Guarantee Exemption

U.S. driver's licenses, Social Security Numbers, or even expired visas don't automatically exempt foreign sellers from FIRPTA. Tax residency is the key factor.

Misconception 6: FIRPTA Only Applies to Expensive Properties or Developed Land

FIRPTA applies to all sales of U.S. real property interests by foreign persons, regardless of price or property type.

Misconception 7: FIRPTA is the Buyer's Problem

Both buyer and seller have responsibilities under FIRPTA. Both parties cooperation is essential to avoid penalties.

Misconception 8: A U.S. Spouse Makes the Couple Exempt

Only the U.S. spouse's share is exempt. The foreign spouse's portion is subject to FIRPTA withholding.

Key Takeaways:

• FIRPTA is a withholding, not the final tax. Over-withholding can be refunded.
• Proper documentation is key to a smooth transaction
• FIRPTA is complex; seek tax advice from a licensed tax professional expert in FIRPTA matters.
  

Understanding FIRPTA and its nuances is crucial for anyone involved in U.S. real estate deals with foreign sellers. Don't let misconceptions lead to costly mistakes.