Client Background:
A non-resident investor, who owned multiple commercial properties in the U.S., was looking to sell several assets and required assistance with FIRPTA compliance. The investor had previously faced challenges with the complexities of FIRPTA regulations and wanted to ensure that this transaction would be smooth and tax-efficient.
Challenges:
- Managing FIRPTA withholding on the sale of multiple properties.
- Coordinating with multiple buyers, real estate agents, and closing agents.
- Reducing the withholding amount to avoid unnecessary financial strain on the client.
Solution:
Our team provided end-to-end assistance in handling the FIRPTA process. First, we assessed each property’s value and projected the tax implications of selling them. Our experts prepared and submitted the necessary withholding certificate applications to the IRS to reduce the withholding amount. By working closely with the client’s legal and real estate teams, we ensured, that all transactions were compliant with FIRPTA regulations and that the withholding amounts were minimized.
Results:
- FIRPTA withholding was reduced from the standard 15% to just 3% across all properties, significantly reducing the amount of funds withheld at closing.
- The transaction was completed without delays, thanks to the early submission of FIRPTA-related documents and close coordination with all parties involved.
- The client avoided potential IRS penalties and received detailed tax advice for future U.S. investments, ensuring full compliance and tax efficiency.