Purchasing Resale from a Foriegn Seller?

[epress]

I just found out that our DVC resale is being sold by Non-US Citizens. I have been told that there is a 10% tax being collected from the seller but that it needs to be recorded under my SSN for the IRS to process the transaction. It all seems legit but I'm just a little leary and wondering if anyone else has experience with this and did it cause you any problems. Thanks in advance for the input.

 

[Mlissa88]

Who is asking for your SSN? The seller directly or the broker you are working with?

 

[epress]

the closing companies are requesting - Magic Vacation Title & Dee Jay & Associates

I would never provide that info to the Seller direct.

 

[robert@dvcstore]

Since Magic Vacation Title handles 99% of the closings here at The Timeshare Store, Inc.®, I asked about the social security number request.

*** works with a FIRPTA specialist and works closely with that company to make sure all FIRPTA requirements are fulfilled. Yes, the closing company does need the social security number of the buyer so that the specialist can submit the paperwork correctly. This will avoid the situations where the buyers can get letters from the IRS looking for funds that were already paid by the closing company.

Remember, this is only if the seller is not a resident of the US. I hope this helps.

Robert

 

[silmarg]

FIRPTA standsfor the Foreign Investment in Real Property Tax Act. It was enacted in 1980.

Basically this act mandates a that the buyer withhold 10% a purchase of US real property interests where the seller is not a US person - and remit the funds to the Internal Revenue Service.

The basic premise here is a non US person may owe tax on the gain on the sale of said property. And the IRS would lack jurisdiction over chasing the taxpayer. So the IRS collects a 10% tax on the gross proceed up front.

Assuming the actual tax is less (or is zero in the case of a loss). The non US person would file a US return showing no tax due, and would get the 10% prepayment back as a refund.

The responsibility to collect and remit this tax falls on the buyer of the property - so the title company is actually covering for your interests here. They will be filing form 8288 on your behalf and sending the 10% to the IRS.

(I am a tax practitioner, but dont normally deal in this area)

 

[epress]

sil-

thanks for the great explanation-much more confortable with this after your summary and discussing further with the Title Co.

 

[silmarg]

np...

I am lurking... hoping to get a good DVC on the resale market (after I stay ar SSR in a couple of weeks)

where did u buy?

 

[epress]

sil-
useing The Timeshare Store-Disney claimed my 1st try but 2nd went thru. TSS has been great thus far.

 

[5DizFans]

We bought from the Time Share Store. We also bought from sellers who were out of the country. I would have known nothing aobut the tax, until the put the wrong SSN on the tax forms and I got a bill from the IRS. After the number was corrected everything was fine! The Time Share store was very helpful with the whole process. Aside from the initial panic that came with receiving a letter from the IRS, all is well!

We plan on booking our first trip soon!

 

[epress]

bought at SSR-maybe misread your question.