If purchasing home from a foreign person…

My friends at Title One provided some useful information on purchasing a home from a foreign person.  Keep this in mind for upcoming purchases.

Here’s a short summary…

The following article was written for us by Barbara A. Olson, a local tax attorney.

By Barbara A. Olson
612-436-3293
bolson@olsonlawltd.com

Generally under Federal law, when the seller of real property is a foreign person, the buyer is required to collect the tax on the Seller’s gain from the sale by withholding 10 percent of the sales price. If the buyer does not do so, the Buyer, and sometimes his agents, are liable for payment of the Seller’s tax.

Here are a few Red Flags to watch out for:

If the Seller is a foreign person, make sure the Seller has, or immediately applies for, a U.S. TIN (Tax Identification Number), and determine what documents will be needed at closing; If the Seller believes that its actual gain on the transaction is less than 10% there is a mechanism to reduce withholding, but it takes time to deal with the IRS and get a decision, so an escrow may be needed. If you believe that the Seller has provided a False Non-Foreign Certificate, get help. You could become personally liable. The Seller is requesting an exemption from FIRPTA withholding requirements. Again, get help.

In any of the above situations, Barbara A. Olson, tax attorney, can help you navigate the hazards of FIRPTA compliance.

Read her more detailed article here: Full Article

Here is contact info for Title One Inc…

Randy Heltemes
President
randyh@titleone.com
612-435-8519

Title One Inc.
Bloomington Southpoint Office Center
1650 West 82nd Street, Suite 1070
Bloomington, MN 55431
(952) 806-6430 Office
(952) 806-6440 Fax

About Mama G

Fueled By Real Food
This entry was posted in Buyers, Latest News, Legal, Real Estate. Bookmark the permalink.

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