Every Closing Needs a FIRPTA Answer
Why “the seller is probably a U.S. person” is not the same thing as a documented determination
🐐 About Wicked Title | 🔍 Search Knowledge | 🛒 Shop | 📢 Be a Sponsor
Every real estate closing requires a FIRPTA determination, even when the seller is a U.S. person.
Many real estate professionals think of FIRPTA as something that only matters when the seller is clearly foreign. But every real estate closing still needs a FIRPTA determination, even when the seller is ultimately treated as a U.S. person and no withholding is required.
Under IRC §1445, the buyer can become liable if FIRPTA withholding applies and isn’t properly addressed. Whether withholding is ultimately required or an exemption applies, it’s important to document how the determination was reached and retain that documentation in the closing file.
So the question is not only whether withholding is required.
The question is whether the closing file clearly shows how that answer was reached.
If the seller is a U.S. person, the file should document that. If an exemption applies, the file should support that. If withholding is required, the file should reflect how the issue was identified and handled.
Because “we assumed it didn’t apply” is not exactly the sentence anyone wants to be explaining to an IRS Auditor.
That is why we are excited to partner with TitleTools to bring the FIRPTA Determination Tool to title companies, attorneys, and real estate professionals nationwide.
The platform guides users through a structured FIRPTA determination process and automatically generates a FIRPTA Determination Certificate. The goal is simple: help closing professionals create a more consistent, documented, and defensible approach to FIRPTA review.
To introduce the platform, Foreign Tax CPA is offering closing professionals 30 days of complimentary unlimited access.
During the trial, users can:
Run unlimited FIRPTA determinations
Use real or test transactions
Generate unlimited FIRPTA Determination Certificates
Absolutely free for 30 days.
Getting started takes less than three minutes.
Visit: titletools.io/firpta
Use promo code: FTCPA4U
We would love to hear your feedback after you have had a chance to try it.
And, as always, if your transaction involves a foreign seller, foreign-owned LLC, estate, trust, ITIN issue, withholding certificate, or another international tax question, our team at Foreign Tax CPA is here to help.
The Wicked Title Forum is a collaborative resource. If you spot something outdated or inaccurate, leave a comment—we’ll get it fixed.
**DISCLAIMER**
Content is for informational purposes, operational awareness and workflow strategy. While every effort is made to ensure accuracy, it is not meant to be a compliance directive or replace the specific legal/financial advice of your retained experts. As always evaluate new information & tools with your underwriter/attorney, accountant/financial advisor, IT/security team, and internal policies, as needed, before implementation.
This site is partially supported by sponsor ads and sponsored content.