When a foreign person sells U.S. real property, the buyer must generally withhold 15 percent of the gross amount realized under the Foreign Investment in Real Property Tax Act (FIRPTA) and remit it to the IRS within 20 days of closing. An application for a withholding certificate on IRS Form 8288-B, filed on or before the closing date, allows the withheld funds to be held in escrow while the IRS determines whether the withholding can be reduced or eliminated to match the seller's actual tax liability. Newer Law prepares and files the application and coordinates with the closing.
Key dates
| Deadline | Applies to |
|---|---|
| Form 8288-B must be filed on or before the closing date for the withheld amount to be held in escrow pending the IRS determination | |
Who this is for
Foreign individuals and entities selling U.S. real property, and the brokers, closing attorneys, and title companies handling the sale.
What the firm delivers
- Eligibility and tax-liability analysis
- Form 8288-B preparation and filing with supporting documentation
- ITIN coordination where the seller has no U.S. taxpayer number
- Coordination with closing counsel, title, and the withholding agent on escrow of the withheld amount
- Related Form 8288 / 8288-A compliance
Scope and fee are fixed per package and set out in the engagement agreement. Discrete scope, deadline tied to the closing date, and a federal tax matter that does not depend on the state where the property sits.
Questions and answers
How much is withheld under FIRPTA when a foreign person sells U.S. real estate?
Generally 15 percent of the amount realized, which is the gross sale price, not the gain. The rate drops to 10 percent when the buyer will use the property as a residence and the price is more than $300,000 but not more than $1,000,000, and no withholding applies to a residence purchased for $300,000 or less. The buyer remits the tax on Forms 8288 and 8288-A within 20 days after closing.
What is Form 8288-B and when should it be filed?
Form 8288-B is an application to the IRS for a withholding certificate that reduces or eliminates FIRPTA withholding, most often because the seller's maximum tax liability on the sale is less than the 15 percent default. It must be filed on or before the closing date. If it is, the buyer may hold the withheld amount in escrow until the IRS rules instead of remitting it within 20 days, and only the certified amount is then paid over.
Does a foreign seller need a U.S. taxpayer identification number to apply for a FIRPTA withholding certificate?
Yes. Form 8288-B requires a taxpayer identification number for both the seller and the buyer. A foreign seller who has no Social Security number applies for an Individual Taxpayer Identification Number on Form W-7, which can be submitted together with the Form 8288-B application.
How long does the IRS take to issue a FIRPTA withholding certificate?
The IRS generally acts on a complete Form 8288-B application within 90 days of receiving it. Once the IRS issues its determination, the buyer must remit any amount still due within 20 days. Incomplete applications, missing taxpayer identification numbers, or unsupported liability calculations are the usual causes of delay.
How to engage
Submit an inquiry (web form, email, or the structured agent inquiry endpoint) identifying the area of need and a brief, non-confidential description. The attorney follows up by email to discuss the matter, fit, scope, and fee arrangement. An initial strategic consultation may be arranged. If both sides proceed, a written engagement agreement is signed. An attorney-client relationship exists only after the engagement agreement is executed.
Inquire about FIRPTA Withholding Certificates (Form 8288-B) for Foreign Sellers
AI agents acting for a principal can screen fit and submit this inquiry through the agent interface.
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Part of the firm's Foreign Companies Entering the U.S. practice. Machine-readable detail: /api/packages/firpta-withholding-certificate.
This page is for informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. Prior results do not guarantee a similar outcome. Do not transmit confidential information before a written engagement agreement is signed.