06Apr 2021 by Pat Geddie
Attention All Home Buyers Part II: FIRPTA and the Statute of Limitations

Attention All Home Buyers Part II: FIRPTA and the Statute of Limitations

Tax Law
By Kerrin N.T. Liu This article is a followup to our previous article entitled “Attention All Home Buyers.” In our previous article, we introduced Foreign Investment in Real Property Tax Act of 1980 (hereinafter “FIRPTA”); what it is, who it applies to, exemptions, and the consequences of noncompliance. In this article we discuss the possible application of the statute of limitations in cases where unwitting U.S. buyers of a noncompliant FIRPTA transaction are subjected to a lien on their purchased property. Options Moving Forward and the Statute of Limitations. The most straightforward way of taking a tax lien off of a title is to pay the tax lien in full. However, this is not an equitable result for many buyers since the tax should have been paid by the foreign…
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09Dec 2019 by Pat Geddie
FIRPTA and Partnership Interest Withholding Rules Under the Tax Cuts and Jobs Act

FIRPTA and Partnership Interest Withholding Rules Under the Tax Cuts and Jobs Act

Tax Law
By Anthony Diosdi The passing of the 2017 Tax Cuts and Jobs Act brought many changes to the Internal Revenue Code. One change relates to the handling of the sale of partnership interests by foreign persons. In particular, Sections 864(c)(8) and 1446(f) withholding rules were added to the Internal Revenue Code.Explanation of Withholding Tax and Substantive TaxThe withholding tax under Internal Revenue Code Section 1446(f) requires a 10 percent withholding on the sales price of a partnership interest by foreign persons unless certain exceptions are met. One such exception is if the seller furnishes an affidavit to the buyer stating, among other things, the seller is not a foreign person. The 10 person withholding, similar to the 15 percent Foreign Investment in Real Property Tax Act (“FIRPTA”) withholding on sales…
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