Withholding Process
The standard FIRPTA withholding rate is 15% of the total amount realized (generally the sale price) from the sale. Here’s a quick breakdown:
- The buyer is responsible for withholding the tax.
- The withheld amount must be remitted to the IRS within 20 days of the sale using Form 8288 and Form 8288-A.
- The seller’s TIN (Tax Identification Number) is required for proper filing.