Hello ALTA;
We get this question often and I thought I share the information with you.
Q; Why a person with a SSN is subject to FIRPTA?
A; There are many instances in which a NRA (Non-resident Alien) may have a SSN; below a few or the most common ones;
- The NRA is an international student in a U.S. institution, the NRA is eligible to have a SSN, a state driver's license and to work for the institution he/she is studying at, however, for tax purposes the student is required to file a 1040NR (Non-Resident) and the days of presence in the U.S. are moot. (students can live in the U.S. for years, and their days of presence do not count for tax purposes)
- A NRA with a diplomatic status, they are by definition FOREIGN but eligible for a SSN.
- A NRA with a U.S. work visa, NRA is issued a SSN and after the contract with the company that brought the NRA to the U.S. expires the NRA is transferred to a different country or is back to his/her country of origin, the SSN issued to the NRA is his/hers for life, but when the person leaves the country they are considered foreign even with their SSN.
Remember, EVERY real estate transaction is a FIRPTA transaction UNLESS the seller has one of the following documents ;
- U.S. birth certificate
- U.S. passport
- U.S. naturalization certificate
- U.S. Permanent Resident Card (aka "Green Card")
SPT (Substantial Presence Test) should be handled by a tax professional to make sure the seller meets the federal tax requirements to be exempt.
What Is FIRPTA? https://youtu.be/yzX19A2XTIU
Que es FIRPTA? https://www.youtube.com/watch?v=kNcVjuJ2rSs
If you have questions, give us a call....
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Mary Enzi CAA
Tax Solutions – FIRPTA Consulting
mary.santiago@taxss.com+1 (281) 578-1040
Barker TX
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