Many real estate agents do not realize that tax withholding must sometimes occur when a transaction involves the sale of real property interest by a foreign person in the US. As much as 10 % of the sale price has to be sent to the IRS following the closing and the Buyer and the Professionals involved in the transaction are responsible for making sure that this occurs. If the Seller is a foreign person, the property sale price is higher than 300K, the buyer is not purchasing as a principal residence and you fail to withhold, the buyer and the related professional in the transaction may be held liable for the tax.
For more info on Tax withholding with foreign owners in the US visit the following website.
http://www.irs.gov/businesses/small/international/article/0,,id=105000,00.html
Having a good partner CPA with international experience is important in these transactions. In many instances, exemptions can be requested by the international accounting specialist to lower the withholding amount and to make sure that the appropriate income tax return is filed with IRS.
Regards,
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Good tip! In Connecticut, our attorneys are very good at making sure this fee is paid right at closing. Throughout most, but, not all communities, the closing held at the Buyer's attorney law firm. Part of our state uses Title Companies. I have used both, and both are very good at procuring the correct funds that are owed by both sides of the transaction.
It's a Good Life!
Fran Rokicki, Clubnet~Mentor, Broker~CT