Santiago J. Padilla, P.A.

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Located in the Miami metropolitan area, the Law Offices of Santiago J. Padilla, P.A., offers comprehensive services for business clients with a variety of needs.

Foreign National Seller of Real Estate Must have an ITIN in Order to Sell the Property

Over the last several years, many foreign nationals invested in real estate in South Florida, but never obtained an Individual Taxpayer Identification Number or ITIN. However, that may be a problem when the foreign national wants to sell the property because the Internal Revenue Service ("IRS") requires foreign sellers of real property to obtain an ITIN in order to sell the real property. These rules were implemented several years ago, but we still get foreign nationals seeking to sell their property without an ITIN. This is sometimes further complicated because the IRS will generally not issue an ITIN unless there is a demonstrated need for the ITIN, which creates a "Catch-22" situation.

However, the solution is relatively simply. The foreign national seller simply has to file a copy of Forms 8288 and 8288-A, together with Form W-7 (the request for an ITIN) and the IRS will issue an ITIN to the foreign national seller. Form 8288 is the U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interest, and Form 8288-A, is a Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests. These forms are required to be filed under Section 1445 of the Internal Revenue Code, commonly known as the FIRPTA regulations, codified at 26 U.S.C. Section 1445.

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If you have any questions regarding real estate law or buying or selling real estate, please do not hesitate to contact me, Santiago J. Padilla, Esq., either at 800-483-7197, or [email protected]

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