As the closing agent, there are times when the parties we're working with on transactions ask for advice that we are not allowed to give. Or, on occasion it may be assumed that we are responsible for certain tasks that we are not allowed to perform. And with our multicultural / international team in the Puget Sound area working with agents and their buyers from foreign countries on a regular basis, FIRPTA is one of those things. We often get questions about it but have clear limitations on providing advice or performing certain tasks.
So with that in mind we drafted the following post:
I wanted to share it here because it answers the top questions we recieve about FIRPTA from behind the Escrow Desk, including:
- What is FIRPTA?
- What is the purpose of the FIRPTA 10% withholding?
- Who is responsible for finding out if the transferor is a foreign person?
- Are there exceptions from the FIRPTA withholding?
- Who is responsible for withholding the 10%?
- How and where is the FIRPTA withholding paid?
- What is the settlement agent's role with regards to FIRPTA?
- Will a Limited Practice Officer give legal advice with regards to FIRPTA?
Have you had a transaction that required the FIRPTA tax? How did it go? Were buyer and seller expectations set properly?
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