Omar was a pleasure to work with. He made the process less stressful and seamless as possible.
Are you a non-U.S. resident planning to sell or invest in real estate within the United States? If so, you may be subject to complex tax rules under the Foreign Investment in Real Property Tax Act (FIRPTA)—a law that can result in significant withholding of funds from your property sale if not handled correctly. FIRPTA regulations require foreign sellers to comply with specific tax obligations, including a withholding of up to 15% of the total sales price, regardless of whether any profit was made. Failing to navigate these rules properly can lead to unnecessary delays, lost funds, and serious IRS complications.
FIRPTA = Foreign Investment in Real Property Tax Act.
Applies when a foreign seller sells U.S. real estate.
Buyer must withhold 15% of the sale price.
Withholding happens at closing.
Exempt if sale ≤ $300,000 and buyer uses as primary home.
Forms 8288 & 8288-A must be sent to the IRS within 20 days.
Seller needs a U.S. TIN/ITIN for processing.
Title company usually handles submission.
Buyer is liable if FIRPTA isn’t withheld correctly.
Proper FIRPTA compliance ensures a smooth, risk-free closing
FIRPTA stands for the Foreign Investment in Real Property Tax Act of 1980, a federal law enacted by the U.S. Congress to ensure that foreign persons pay tax on dispositions (sales or transfers) of U.S. real property interests (USRPIs). The Foreign Investment in Real Property Tax Act (FIRPTA) requires foreign sellers of U.S. real estate to pay a withholding tax — typically 15% of the gross sales price. This applies to both residential and commercial properties. Our tax professionals at OneWisdomWay help you avoid unnecessary withholdings, maximize legal deductions, and comply with IRS regulations—all while safeguarding your financial interests. Before FIRPTA was enacted, foreign individuals and entities could sell U.S. real estate and avoid paying U.S. taxes on any capital gains. FIRPTA closed this loophole by creating a withholding system that ensures tax compliance from non-resident investors.
Form 8288 is the IRS form used by the buyer or withholding agent in a U.S. real estate transaction involving a foreign seller. It is submitted to report and remit the required FIRPTA withholding tax, which is typically 15% of the gross sales price. This form is completed shortly after closing and ensures the IRS receives its portion of the proceeds.
Form 8288-A is the accompanying document submitted with Form 8288. It serves as a statement of withholding for the foreign seller. Once processed, the IRS returns a stamped copy of Form 8288-A to the seller, which acts as proof of the amount withheld and is essential for filing a U.S. tax return or claiming a refund.
Form 8288-B is used by the foreign seller to request a reduced or eliminated FIRPTA withholding before the closing occurs. By submitting this form, the seller can ask the IRS for a withholding certificate that adjusts the amount to be withheld based on the actual expected tax liability, rather than the standard 15% of the gross sale price.
Form 1040-NR is the U.S. tax return for nonresident aliens. After the sale of a U.S. property, the foreign seller must file this return to report any capital gain, pay any additional tax due, or request a refund of excess FIRPTA withholding. It is typically filed the year following the sale and is critical for finalizing the seller’s U.S. tax obligations.
Form W-7 is the application used to obtain an Individual Taxpayer Identification Number (ITIN) from the IRS. It is required for foreign individuals who are not eligible for a U.S. Social Security Number but need to file a U.S. tax return or meet FIRPTA reporting requirements. In the context of U.S. real estate sales, foreign sellers must have an ITIN to submit forms like 8288-A and 1040-NR, and to claim any tax refunds. This form is submitted with proof of identity and foreign status, such as a valid passport, and is often filed alongside other FIRPTA documentation.
Whether you’re based in Canada, the UK, China, the UAE, or anywhere else—our digital-first process makes it easy to work with us from any country, any time zone. We bring clarity, confidence, and compliance to your U.S. real estate transactions.Time-Sensitive? We Offer Expedited FIRPTA Processing! Real estate closings don’t wait—and neither should your money. Our experienced team helps you fast-track FIRPTA withholding certificates and IRS approvals to avoid escrow holdbacks and delayed payments.
Omar was a pleasure to work with. He made the process less stressful and seamless as possible.
Buyer Representative
My condo was sold in 1 day!!!! Will be using him again for the purchase of my new home.
Seller Representative
Thankful I choose Omar. He is very knowledgeable and was available every step of the process.
Buyer Representative
Omar’s level of professionalism is by far the best I have experienced in the industry.
Landlord Representative
Omar followed approval process through completion and answered our questions, even after-hours.
Tenant Representative
Omar, went out his way doing the Pandemic to ensure we were able to find our next place to call home.
Tenant Representative
We had a great experience with Omar. He was very attentive to our requests. I highly recommend.
Buyer Representative
Omar is very knowledgeable about the real estate market. I found him to be both professional and congenial.
Buyer Representative
He understood my needs and provided the info to make the right decision on the prefect home.
Buyer Representative
He deserves the highest praise. I will definitely be referring my family and friends to Omar.
Seller Representative