A nonresident alien owns a home. My client will be pruchasing it from the nonresident alien. Are there any withholding requirements for the buyer's? I'm not sure where to begin looking.

Thx.

Check out irs.gov for more details.

There are generally two forms used to report and paying tax relating to the sale of property by a non-resident alien.

Form 8288 "U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests (Section 1445)" and Form 8288-A "Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests (Section 1445)".

Non resident alien sellers (aka the Transferee) must file Forms 8288 and 8288-A to report and pay to the US Treasury any tax withheld on the acquisition of U.S. real property interests. These are also used by foreign corporations, partnerships, estates, and trusts that must withhold tax on distributions and other transactions involving U.S. real property interests.

The non resident alien must obtain an ITIN (form W-7) in order to file the return.

The tax withheld on the acquisition of a U.S. real property interest from a foreign person is reported and paid using Form 8288. You must file Form 8288 by the 20th day after the date of the transfer.

If an application for a withholding certificate is submitted to the IRS before or on the date of a transfer and the application is still pending with the IRS on the date of transfer, the correct withholding tax must be withheld, but does not have to be reported and paid immediately. The amount withheld (or lesser amount as determined by the IRS) must be reported and paid within 20 days following the day on which a copy of the withholding certificate or notice of denial is mailed by the IRS.


Usually the withholding agent (real estate sales agent) must prepare Form 8288–A for each person from whom tax has been withheld. Attach copies A and B of Form 8288–A to Form 8288. Copy C is for the sellers records.

IRS will stamp Copy B and send it to the person subject to withholding. That person must file a U.S. income tax return and attach the stamped Form 8288–A to receive credit for any tax withheld.

A stamped copy of Form 8288–A will not be provided to the transferor if the transferor's TIN is not included on that form. In this case, to get credit for the withheld amount, the transferor must attach to its U.S. income tax return substantial evidence of withholding (for example, closing documents) and a statement that contains all the required information shown on Forms 8288 and 8288–A including the transferor's TIN.