Calculate your FIRPTA withholding

Two inputs and you're done. The exceptions depend on the price and on whether the buyer will use it as a residence.

Sale price of the property (USD) Will the buyer use it as their residence?

"Residence" has a precise definition: the buyer (an individual) must have definite plans to live in it at least 50% of the time it is used during each of the first two 12-month periods.

Withholding at closing

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It's a withholding, not the final tax. The actual tax is computed on your gain when you file the 1040-NR for the year of the sale. If the withholding exceeded the tax, the excess is refunded — but the IRS holds it for 6 to 18 months. That's why it pays to plan ahead.

The three ways to keep FIRPTA from crushing you

In order of preference: reduce before, document during, recover after.

Before closing: Form 8288-B (withholding certificate)

If your actual tax will be lower than the withholding (small gain, or even a loss), you can ask the IRS for a certificate that reduces or eliminates the withholding. It is filed before or on the day of closing — it requires an ITIN and a sound calculation of the gain. The withheld amount stays in escrow until the IRS responds.

At closing: check exceptions and forms

The closing agent files Forms 8288 and 8288-A with the withholding within 20 days. Demand your copy of the stamped 8288-A — it is your proof for recovering the money. Without that paper, the claim gets complicated.

After: 1040-NR for the year of the sale

You report the sale, compute the actual tax on the gain (capital gains rates are usually far lower than 15% of the price) and claim the difference. You need an ITIN — if you don't have one, it is processed along with the return (Form W-7).

The three FIRPTA myths

"I have an LLC, so FIRPTA doesn't apply to me." False if the LLC is single-member (disregarded): for FIRPTA, the seller is you, a foreign person. The withholding applies all the same.

"It's a 15% tax." No: it's a withholding on account, computed on the gross price. Your actual tax comes from the gain — it can be much less, or more if there was a lot of appreciation and recaptured depreciation.

"The buyer is foreign too, so there's no withholding." The obligation to withhold depends on the seller being foreign, not the buyer. And the party legally responsible for withholding is the buyer — that's why closing agents take it so seriously.

About to buy or sell? FIRPTA is planned before the deed is signed.
15-minute consultation with a CPA: $29. You can also calculate the total cost of your purchase in the real estate calculator.

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Important notice: FIRPTA (IRC §1445) has additional exceptions and nuances (entities, installment sales, mixed-use properties, 21% withholding on certain entity distributions). This tool covers the typical case of a direct sale by a foreign individual for informational and educational purposes — it does not constitute tax or legal advice and does not create a professional-client relationship. Your case should be reviewed with a licensed professional. Sumalis is part of the Onell.us / Emprendenus ecosystem.

FIRPTA: the withholding that surprises every foreign person selling U.S. property