Question
JamesandTeresajointlyownrealpropertyand are selling it toBobfor$1,200,000. James and Teresa arenotU.S.citizens,arenotresidentsoftheU.S.,theyare nonresidentsforU.S.incometaxpurposes,andhaveneverhadaSSNor ITIN. Would there be aFIRPTAwithholdingrequired?Ifso,why? Whatwould be therateofwithholdingthatisapplicable? Onwhatamountdoesthewithholdingapply? The purchase price? andwhatwould be theamountof
JamesandTeresajointlyownrealpropertyand are selling it toBobfor$1,200,000. James and Teresa arenotU.S.citizens,arenotresidentsoftheU.S.,theyare nonresidentsforU.S.incometaxpurposes,andhaveneverhadaSSNor ITIN.
- Would there be aFIRPTAwithholdingrequired?Ifso,why?
- Whatwould be therateofwithholdingthatisapplicable?
- Onwhatamountdoesthewithholdingapply? The purchase price? andwhatwould be theamountof withholding?
There is a mortgage on the property for $1,000,000, does this mortgage affect the withholding rate? what would be the applicable withholding rate.
- Whoshouldbethewithholdingagent? And what form does the withholding agent have to file? Is there a deadline for the form to be filed?
- If withholding agent would have to file a form, then how many forms would the withholding agent have to file?
- IfJamesandTeresapaid$1,500,000forthepropertywhentheypurchaseditthreeyears ago,whatcantheydotoreduceoreliminatewithholding?
What if Bobispaying$120,000fortheproperty,how muchshouldbewithheld? IfFIRPTAisnot filedwho wouldhaveapenaltyriskandwhat would be thepenalty?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Statistics For Engineers And Scientists
Authors: William Navidi
3rd Edition
73376345, 978-0077417581, 77417585, 73376337, 978-0073376332
