So they take out the funds out of the closing funds I wire or am I expected to set aside another 1500.-2000.?Yes, it's your responsibility to make sure taxes are withheld from the seller's proceeds, or you may end up responsible. Hence you fill out the form and instruct title agent to withhold and remit payment on your behalf. So, yeah, fill out the form, and read it to understand why! It's the title company's job to help you, but really in fact they are doing you a favor, to make sure you don't end up on the hook. It's not like we know the requirements, when dealing with foreign sellers.
Does the 10-15% come out of the closing funds that I send or do they expect me to also set those funds ,say 1500.-2000.in addition to what I'm paying for the contract?
Great3
A question just came to mind as I was reading this thread - if both seller and buyer are outside the US and neither is a US citizen, does FIRPTA come into play?
Thanks. I was just wondering.Of course, the IRS can put a lien on the property. The buyer is still a US property owner and subject to the IRS's jurisdiction.
A question just came to mind as I was reading this thread - if both seller and buyer are outside the US and neither is a US citizen, does FIRPTA come into play?
Oh yes, I understand that well. Just wondered whether the foreign buyer had to fill out the FIRPTA forms like a US buyer does. As RoseGold says, the Feds can put a lien on it and cause a mess when the new owners become sellers, so FIRPTA reigns over everyone.The gov't wants it cuts of the money. Any time there an international seller involved, they want payment of taxes on possible profits, only they don't know your cost basis, so take a percentage of your sales price up front. It's up to the foreign seller to file US income taxes to establish proper cost basis and proper profit and taxes due, and claim back any differences that got withheld. But how many foreign seller do you think do that? Cha-ching... Win, Win, for the US gov't....
Great
Are they the same as the title company?Out of the funds you wired... it's the seller's that needs to pay, but it's the buyer's job to make sure the sellers pay by instructing closing agent to withhold the amount needed.
Great3
Are they the same as the title company?
ThanksYes, the closing agent at the title company.
Great3
Thanks