FIRPTA Checklist for Foreign Sellers

✅ FIRPTA Checklist for Foreign Sellers

🔹 BEFORE LISTING THE PROPERTY

• Confirm foreign status for tax purposes.

• Inform your real estate agent that FIRPTA will apply.

• Consult a U.S. tax professional about estimated capital gains and tax liability.

🔹 BEFORE CLOSING (IDEALLY 2–3 MONTHS BEFORE)

• Decide whether to apply for a withholding certificate (IRS Form 8288-B).

  • Gather documents: purchase agreement, estimated gain/loss, tax ID (ITIN).

  • File Form 8288-B with the IRS.

  • Notify escrow agent/closing attorney to hold funds in escrow pending IRS response.

• If you don’t apply for a certificate:

  • Prepare for 15% withholding on gross sales price at closing.

  • Ensure buyer or escrow agent is aware of FIRPTA requirements.

🔹 AT CLOSING

• Buyer/closing agent withholds up to 15% of sale price.

• Buyer files Form 8288 & 8288-A with the IRS and sends payment.

• Seller receives a copy of Form 8288-A once stamped by IRS.

🔹 AFTER CLOSING

• If you didn’t apply for a withholding certificate, file a U.S. tax return for the year of sale:

  • Use Form 1040-NR (individuals) or the appropriate business return.

  • Report capital gain/loss and calculate actual tax liability.

  • Claim a refund if more was withheld than owed.

🔹 IF APPLYING FOR A REFUND EARLY

• Wait to receive your withholding certificate from the IRS (can take 90+ days).

• Once approved, escrow can release funds or send the adjusted withholding to the IRS.

• Later, file your U.S. tax return to reconcile and claim any remaining refund.

📅 Suggested Timeline