Hi everybody, this is Francine Gonzales with Innovative Transactions. We are a virtual real estate transaction coordinating company here in California. I am a certified transaction coordinator and also a certified CARs form trainer. My goal is to bring valuable information and educate my real estate friends on the forms we use in our everyday transactions. Today, I'm going to provide information on the Qualified Substitute form along with the Seller's Affidavit of Non-Foreign Status. These two forms are often misunderstood in transactions, so it is crucial that we understand the legalities and advise our clients correctly on how to use them. I have some notes to ensure I cover everything accurately. The Seller's Affidavit of Non-Foreign Status is commonly known as the FERPA form, which stands for Foreign Investment in Real Estate Property Tax Act. Since January 1st, 1985, this Act has required buyers to withhold 10 to 15 percent of the gross sales price and send it to the IRS, if the seller is foreign. It is the buyer's responsibility to ensure these taxes are withheld and directed to escrow for payment to the IRS. The seller is required to provide the buyer with a Seller's Affidavit, also known as the CAR form AS or the FERPA form. This form must include the seller's tax identification number, which is often the social security number. It must also indicate the seller's foreign status, if applicable. The seller must sign this affidavit under penalty of perjury, making it crucial for all information on the form to be accurate. One of the main challenges in our transactions is obtaining the social security number on the form. Many times, we receive forms without a social security number or ones that state it is on file with escrow. According to the IRS Code, the seller must provide...
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Firpta real estate Form: What You Should Know
S. Tax office, which may include a Federal, State and Local Tax Authority. 2. All documents, statements and representations made, under penalty of perjury and the fact of sale, are, except in limited circumstances, true and correct. Filer's Signature | Fax from IRS | IRS Fax Information 3. If, at the point of the seller's first sale, the seller is a non-U.S. person and has not completed Form 8288-B (Application For Withholding Certificate For Dispositions by Foreign Persons of U.S. Real Estate) and if an IRS employee is present, the seller is required to sign, under penalty of perjury, a second Fax, (with a copy of Form 8288-B), with All of this must be done, within six (6) months of the closing of the sale in the United States. 4. If the Fax of the completed Form 8288-B is not completed prior to the opening of business on the 30th day after the closing date, the tax authority will be required, within six (6) months of the closing date, to issue an Affidavit of Foreign Status in U.S. Dollars (Form W-7) to the non-U.S. person. 5. Non-U.S. Persons who have completed and signed a Form W-7 are subject to an IRS withholding tax for both their gross payments for the sale and the amount of the IRS withholding tax applicable to the sale. 6. For foreign FIR PTA filers, this means the non-U.S. person must complete and Sign Form W-7 electronically (with a digital copy of Form 8288-B). See below for an example of how to use this form All Filers May Need a Form W-7 from IRS (May) Filing and Filing Options | Fax from IRS | IRS PTA Forms Form W-7 Instructions (March 2017) If a U.S. person buys a U.S. real property with an affiliate of a foreign person, what is required to be filed under IRC 8033 or 8530? What types of filings are required from the U.S. person with the foreign person's affiliates? A. 1.
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