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Can a foreign national seller do a FIRPTA 1031 tax deferred exchange?

Can a foreign national seller do a FIRPTA 1031 exchange? 

According to Diane Rivera, Regional Manager for Starker Services, ” Yes,  a Foreign national can do an IRC §1031 tax deferred exchange.  The FIRPTA rules must still be followed and the closing/withholding agent will still need to withhold the 15% at the time of the closing.  The foreign investor will need to coordinate with a CPA to file an Application for Withholding Certificate.  Do you think your customer has the ability to deposit an amount equal to the 15% withholding at the time of closing?  If so, this will allow her to go forward with the exchange while waiting for the withholding certificate from the IRS.  When she provides the approved certificate to the withholding agent, they can then release the 15% back to her. An investor contemplating an IRC §1031 tax deferred exchange should consult with their tax and/or legal adviser in addition to the Qualified Intermediary.” Need a qualified intermediary for your transaction? Diane can be reached at  Diane O. Rivera, CES®, Regional Manager, Starker Services, Inc  305-807-2320  or dianerivera1031@gmail.com   www.starker.com

These transaction are multi-layered and need professional guidance to avoid both  tax and legal liabilities for both buyers and sellers.  We also recommend that sellers use a stand alone FIRPTA rider to make it clear to buyers they will be involved in a FIRPTA transaction.  The Closing Company Title & Escrow can seamlessly handle your FIRPTA sale including hiring the CPA component of the transaction for the IRS Withholding Application . Please contact us for more information at info@theclosingcompany.net or call 305-271-0100.

Does FIRPTA apply to me?

FIRPTA application for withholding IRS form 8288b

Sample FIRPTA IRS withholding certificate 

Intent to reside affidavit

IRS website FIRPTA 

Disclaimer: The Closing Company, Inc. is not a law firm and is not providing legal or tax advice in this post.  For legal advice, please consult with a licensed Attorney. For tax advice, consult with a Certified Public Accountant. Hiring an attorney is an important decision which should not be based solely on advertising. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.



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