Withholding of Tax on Dispositions of US Real Property Interests

Withholding of Tax on Dispositions of US Real Property Interests

Persons purchasing US real property interests from foreign persons, certain purchasing agents and settlement officers are required to withhold 10% of the amount realized on the disposition. It is the responsibility of the buyer in these cases to determine if the seller is a foreign person. The buyer will be ultimately responsible for the 10% withholding.

The 10% withholding applies to:

• the cash paid, or to be paid (principal only),
• the fair market value of other property transferred, or to be transferred, and
• the amount of any liability assumed by the transferee or to which the property is subject immediately before and after the transfer.

The amount realized is generally the amount paid for the property. If the property transferred was owned jointly by U.S. and foreign persons, the amount realized is allocated between the transferors based on the capital contribution of each transferor.

Need More information?

If you have any questions, please contact a member of our International Services Group at [email protected].

Kimberlee Phelan, CPA, MBA
Partner, Team Leader, International Services
609.520.1188
[email protected]

Autor: Tom Girone | [email protected]

The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your individual facts and circumstances.

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