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Top 7 Questions about FIRPTA

Top 7 Questions about FIRPTA

1.   What is F.I.R.P.T.A.?

F.I.R.P.T.A. is an acronym for Foreign Investment Real Property Tax Act.  In 1980 the United States Congress enacted the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) in response to widespread avoidance of U.S. taxes upon the sale of real property by foreign persons.  A U.S. real property interest includes sales of interests in parcels of real property as well as sales of shares in certain U.S. corporations which are considered U.S. real property holding corporations.  FIRPTA’s objective was to ensure at least one level of taxation for the sale of real estate by foreign persons.  Thirty years later, FIRPTA has evolved as more complex holding structures for acquiring and dispossessing real estate have emerged.  FIRPTA is a withholding, it is not a tax. Read the rest of this entry