Want to learn how to legally defer FIRPTA
tax? Call us today at 305-707-0676 for a
consultation or start your flow online now.
1031 Flow for FIRPTA
The 1031 flow applies only to U.S. real estate but is available to both
U.S. citizens and foreign investors. Foreign owners can use a 1031 flow
to avoid the 15% FIRPTA withholding tax when selling U.S. Real Property
Interests (USRPI). By following the six key rules of a 1031 flow, you can
defer taxes on the sale. At 1031 Flow Connection, we specialize in
FIRPTA strategies and ensure your flow complies with IRS regulations.
U.S. citizens and foreign investors. Foreign owners can use a 1031 flow
to avoid the 15% FIRPTA withholding tax when selling U.S. Real Property
Interests (USRPI). By following the six key rules of a 1031 flow, you can
defer taxes on the sale. At 1031 Flow Connection, we specialize in
FIRPTA strategies and ensure your flow complies with IRS regulations.
FIRPTA Explained
FIRPTA, or the Foreign Investment in Real Property Tax Act, is a 15%
withholding tax on the gross sale price of U.S. real estate owned by
foreigners. It’s not the final tax but a prepayment to ensure capital gains
tax is eventually paid. Since foreign sellers file their tax returns at year-end,
the IRS withholds this amount at sale to cover potential taxes owed later.
withholding tax on the gross sale price of U.S. real estate owned by
foreigners. It’s not the final tax but a prepayment to ensure capital gains
tax is eventually paid. Since foreign sellers file their tax returns at year-end,
the IRS withholds this amount at sale to cover potential taxes owed later.
Legally Reduce FIRPTA Tax via 1031 Flow
Foreign sellers can avoid FIRPTA withholding by applying for a withholding
certificate using IRS Form 8288-B before selling. Although approval takes a
few weeks, this approach lets you recover the 15% upfront instead of
waiting over a year to file your tax return.
certificate using IRS Form 8288-B before selling. Although approval takes a
few weeks, this approach lets you recover the 15% upfront instead of
waiting over a year to file your tax return.