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Commonly Asked Questions about IRC 1445 Affidavit Forms

The term foreign person means any person other than I.R.C. 1445(f)(3)(A) a United States person, and. I.R.C. 1445(f)(3)(B) except as otherwise provided by the Secretary, an entity with respect to which section 897 does not apply by reason of subsection (l) thereof.
In general, section 1445(a) provides that any person who acquires a U.S. real property interest from a foreign person must withhold a tax of 15 percent (10 percent in the case of dispositions described in paragraph (b)(2) of this section) from the amount realized by the transferor foreign person (or a lesser amount
Seller shall provide a completed affidavit to the qualified substitute, who will furnish a statement (C.A.R.
The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to income tax withholding (IRC section 1445). The buyer (transferee) of the U.S. real property interest is the withholding agent. The transferee must determine if the transferor is a foreign person.
AFFIDAVIT OF NON-FOREIGN STATUS. Section 1445 of the Internal Revenue Code provides that a buyer of a United States real property interest must withhold tax if the seller is a foreign person.
IRC Section 1445 is a portion of the Internal Revenue Code that involves withholding taxes and tax refunds for a foreign person, the transferor, selling real estate property to a buyer, the transferee, in the United States.
Think of FIRPTA as an advance tax payment. If a foreign person sells their property at a profit, they earn U.S. sourced income, and they have to pay tax on that income. The FIRPTA deposit stays at the IRS until the seller submits a tax return. Then, if they owe less tax, they get a refund for the difference.
By this Affidavit, the undersigned hereby gives sworn representation that it, as seller(s) of a United States real property interest, is not a foreign person as defined in the Internal Revenue Code Section 1445, thus permitting the transferee of the property to waive the ten (10%) percent withholding requirement in