FIRPTA withholding

Tax that the buyer of US real property must withhold from the price when the seller is a foreign person, under the Foreign Investment in Real Property Tax Act. The withholding is a share of the amount realized, not of the gain, and the seller settles the real tax on a US return (Form 1040-NR for a nonresident alien), attaching the IRS-stamped Form 8288-A to claim credit for any excess. No withholding or a reduced rate applies where the buyer will use the home as a residence and the price is low enough, and a seller can ask the IRS for a withholding certificate on Form 8288-B to reduce the amount withheld.