International closing question

RichV03

Earning My Ears
Joined
Mar 19, 2020
We just got our closing documents from first America today and noticed a section that said we need to set aside 10-15% for irs if seller is foreign(our sellers are from japan). Is this something that’s figured into the cost or is this more I have to set aside that I wasn’t planning on? I planned on calling first American tomorrow but figured I’d ask here too Incase someone knew and also if there was any insight in other questions I should ask when I call. Thanks in advance.
 

SleeplessInTO

Mouseketeer
Joined
Jan 22, 2019
Hmm I haven’t seen the section but if this is withholding tax then the buyer (the person paying the funds) sets it aside.
It shouldn’t add to your total cost unless there’s a screw up.

I don’t know US tax but my understanding of WHT in general is that if the IRS wants 15%, and your purchase price is $1,000, then you pay $150 to the IRS and the remaining $850 to the seller.

The lawyer handling this should be doing the remitting on your behalf. You can reach out and ask First American to confirm (I know you’re planning on doing so.) I do wonder if there’s a form that needs to be filled out / signed to go with it.

Good luck - if you can, let us know how the call goes tomorrow? I may have to sell my DVC one day so will be in the (international) sellers shoes.
 

poofyo101

Mouseketeer
Joined
Aug 13, 2019
Hmm I haven’t seen the section but if this is withholding tax then the buyer (the person paying the funds) sets it aside.
It shouldn’t add to your total cost unless there’s a screw up.

I don’t know US tax but my understanding of WHT in general is that if the IRS wants 15%, and your purchase price is $1,000, then you pay $150 to the IRS and the remaining $850 to the seller.

The lawyer handling this should be doing the remitting on your behalf. You can reach out and ask First American to confirm (I know you’re planning on doing so.) I do wonder if there’s a form that needs to be filled out / signed to go with it.

Good luck - if you can, let us know how the call goes tomorrow? I may have to sell my DVC one day so will be in the (international) sellers shoes.
Thats correct
The it comes out of the buyers payment, however it is really the seller setting it aside as they hold it after closing I believe. The title company will handle it for the buyer.
 

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