Init (w-7)

[PensFan]

Anyone else have to complete this?

About to purchase a resale and I was asked to get a ITIN (W-7) number since I am in Canada!

Anyone else have to do this? I see very little info or mention about them here on the board and I was suggested to call an accountant to do it for me and they all seem dumbfounded by it!

From what I can tell they are more for the SELLER so they can get the taxes back as an international seller being the person I made an offer to is also OUTSIDE of the USA.

Anyone know more about this or have to do this as a buyer?


===== EDIT ======

All good I have figured it and and no understand .. extra step for sure when its international seller and buyer! UGH ..

 

[LadyBeBop]

Glad it worked out. However, I'm at a loss at why a buyer should need an ITIN. As you said, it's usually for the seller to report a profit of his sale of an American asset. Even then, it seems a waste for the seller, because I would think most DVC's would sell at a loss. I guess there are a few instances in which someone buys DVC at resale, then resells it at a slight profit. Then, the profit is taxable.

 

[CarolMN]

Glad it worked out. However, I'm at a loss at why a buyer should need an ITIN. As you said, it's usually for the seller to report a profit of his sale of an American asset. Even then, it seems a waste for the seller, because I would think most DVC's would sell at a loss. I guess there are a few instances in which someone buys DVC at resale, then resells it at a slight profit. Then, the profit is taxable.

There are many members who bought retail in the 90's and early 2000's that could sell and have a gain - even after subtracting the commission. For example, the BWV sold in the mid 60's in the late 90's and the average listing/sale is currently in the 80's.

My understanding is that for foreign sellers, a potion of the sale is withheld and that the seller has to fill out a form if he/she doesn't owe any tax. (I am not an accountant or a tax expert/attorney).

 

[rcchello]

Apparently the US gov't requires the buyer to withhold a percentage (10%) of the sale price to take care of possible capitol gains tax on real estate associated with a foreign seller.

The buyer is responsible for sending this tax to the gov't probably the reason you need a Tax id number. This is probably all handled by the broker for you. A U.S. buyer uses their SSN.

The seller needs a tax Identification Number (TIN) which is used by the seller to file the appropriate tax forms to pay the correct tax amount, probably getting a refund.

At least this is my reading of the tax code. I could have gotten parts wrong, not be a tax advisor or lawyer.

 

[PensFan]

First of all ... thread title should read ITIN not init

Secondly ... in short from my understanding in the explanation I was given because the seller was international and I was an international buyer it was needed to show that when the seller was to sell it and the US government would hold 10% the seller needed the ITIN # to submit a claim to get that from the IRS and could only get it back if it was sold to someone outside of the USA THUS me needed to also provide an ITIN #

This did not really make sense to me as anything I could find in reference to needed an ITIN # was always specific to the SELLER never a buyer. It was at that point it seemed too complicated and over my head so we removed ourselves from that deal.

So unfortunately I cant say much more than that! but it would be something to learn more about for the future if anyone else does have to cross this bridge ... IT was obviously NOT needed if we were to buy from an american seller so that was the route we then looked to.

 

[mort1331]

First of all ... thread title should read ITIN not init

Secondly ... in short from my understanding in the explanation I was given because the seller was international and I was an international buyer it was needed to show that when the seller was to sell it and the US government would hold 10% the seller needed the ITIN # to submit a claim to get that from the IRS and could only get it back if it was sold to someone outside of the USA THUS me needed to also provide an ITIN #

This did not really make sense to me as anything I could find in reference to needed an ITIN # was always specific to the SELLER never a buyer. It was at that point it seemed too complicated and over my head so we removed ourselves from that deal.

So unfortunately I cant say much more than that! but it would be something to learn more about for the future if anyone else does have to cross this bridge ... IT was obviously NOT needed if we were to buy from an american seller so that was the route we then looked to.

PensFan, I would talk to whoever was trying to sell you that. If it was one of the big 4 on this site, I would be shocked.
We competed our second resale purchase a few months ago,(using the points this week, couldnt wait) and we are from North of Toronto and the seller from Japan.
I have never had to get an ITIN#, but was looking into it when we thought we were going to sell another contract. From my reading and understanding, I didnt even need it to sell, ONLY if I wanted to try and get that withheld 10% back.
Who did you use?

 

[PensFan]

PensFan, I would talk to whoever was trying to sell you that. If it was one of the big 4 on this site, I would be shocked.
We competed our second resale purchase a few months ago,(using the points this week, couldnt wait) and we are from North of Toronto and the seller from Japan.
I have never had to get an ITIN#, but was looking into it when we thought we were going to sell another contract. From my reading and understanding, I didnt even need it to sell, ONLY if I wanted to try and get that withheld 10% back.
Who did you use?

It was through the Timeshare Store ... as noted though I opted out of the deal as it did not seem RIGHT to me no matter how and where I looked up info on needed one .... plus I was not interested in the "extra" step.

but yes as noted in this thread and all my findings its ONLY needed for the seller. Beyond that more so if the seller is a non-us resident and they want to make a claim to the IRS to get the 10% withholding back.

 

[LadyBeBop]

Thanks for the information. I do deal with taxes for a living; however not with capital gains or foreign sales. I know that a gain on a sale was taxable. I just didn't the seller had to withhold some of their monies in foreign sales. In light of the IRS problems regarding hidden foreign bank accounts, I guess that makes sense.

I also didn't know that DVC resale appreciated that much in value. At least, the proceeds would be subject to the more generous short-term capital gains rates.