International buyer and seller

[Mrs p]

Hello all,

We passed rofr last week but have received an email from the title company stating that they have discovered that the seller is international and therefore we, the buyers, will be responsible for the tax.
They say they can’t do anything because, we the buyersdo not have a tax number.
When queried they keep telling us to seek legal advice!
Very annoyed as I don’t see why we should be incurring legal costs and further risk.
Has anyone come across this ?

 

[I Run Long]

You might want to check out a VLOG on YouTube by Karen Bee. She explains the process of being an international buyer herself - I think the seller was international as well. The seller is responsible for the taxes and the title company should hold back 15% (I believe it is) from the funds you send to them. So the seller has to pay the tax from the proceeds of the sale. I am sure others much wiser than myself will weigh in. Here's the link to that vlog:

 

[Ruttangel]

I bought a contract last year from a Colombia, I’m in Uk.
The title company withheld the FIRPTA tax and paid it over to IRS. I didn’t get involved, who is your title company?

 

[Mrs p]

You might want to check out a VLOG on YouTube by Karen Bee. She explains the process of being an international buyer herself - I think the seller was international as well. The seller is responsible for the taxes and the title company should hold back 15% (I believe it is) from the funds you send to them. So the seller has to pay the tax from the proceeds of the sale. I am sure others much wiser than myself will weigh in. Here's the link to that vlog:

Thanks, that’s what we thought; however the title company is insisting we are responsible/ plus we will have to pay any fines! I’m hoping that are confused - I’m waiting on the agents input now. Thanks again for your response

 

[Mrs p]

I bought a contract last year from a Colombia, I’m in Uk.
The title company withheld the FIRPTA tax and paid it over to IRS. I didn’t get involved, who is your title company?

First American / they keep saying they can’t as we don’t have a tax number, very confusing!

 

[Cyberc1978]

First American / they keep saying they can’t as we don’t have a tax number, very confusing!

I think the reason is that when the payment is made to the IRS they need to have an ITIN number to attach the payment to. In this case both seller and buyer needs an ITIN number. In the past I have bought from an international seller and I'm international too.

Luckily I already had an ITIN number so it wasn't a problem.

I think you need to start the process of getting an ITIN number, its not a difficult to get, its just time consuming.

 

[Mrs p]

The agents response - ‘You need to get an ITIN number in order for the sale to be processed. Nothing extra is being added to your offer but you do need an ITIN number. Here is someone who can help with attaining one…,’

 

[Mrs p]

I think the reason is that when the payment is made to the IRS they need to have an ITIN number to attach the payment to. In this case both seller and buyer needs an ITIN number. In the past I have bought from an international seller and I'm international too.

Luckily I already had an ITIN number so it wasn't a problem.

I think you need to start the process of getting an ITIN number, its not a difficult to get, its just time consuming.

Thanks - that matches what the agent just emailed me - would have been nice to know in advance though! Thanks again

 

[Cyberc1978]

Thanks - that matches what the agent just emailed me - would have been nice to know in advance though! Thanks again

Just be prepared to pay someone for helping you with the ITIN application. So when the title company says nothing extra is added its only partly correct, as nothing is added to their total but you will get a separate invoice from the company helping with the ITIN number.

 

[Mrs p]

Just be prepared to pay someone for helping you with the ITIN application. So when the title company says nothing extra is added its only partly correct, as nothing is added to their total but you will get a separate invoice from the company helping with the ITIN number.

Thanks. Sounds like we need a price and to see if closing can be delayed however long it takes.

 

[Cyberc1978]

Thanks. Sounds like we need a price and to see if closing can be delayed however long it takes.

I see that mine took 3-4 weeks, that was back in 2019. Now with covid my guesstimate is that it might take longer.

 

[Mrs p]

I see that mine took 3-4 weeks, that was back in 2019. Now with covid my guesstimate is that it might take longer.

Thanks, sounds like it could be take awhile. I’ll have to find out if closing can be delayed.