New York foreign investment lawyer Natalia Sishodia (https://sishodia.com/should-i-withhold-firpta-at-closing-on-sale-of-ny-home-if-i-am-not-a-citizen/) of Sishodia PLLC, has recently published an informative article detailing the intricacies of the Foreign Investment Real Property Tax Act (FIRPTA) and its implications for non-citizens during the closing of a New York home sale. The article serves as a crucial resource for foreign individuals navigating the complexities of U.S. tax law in real estate transactions.
The New York foreign investment lawyer discusses the nuances of FIRPTA, a legislation that mandates foreign persons to comply with specific withholding requirements upon the disposition of U.S. real property interests. This includes the obligation for buyers to withhold 15% of the gross purchase price when acquiring property from non-U.S. citizens. “Understanding the FIRPTA guidelines is essential,” states Natalia A. Sishodia, “as non-compliance can lead to significant legal consequences for both buyers and sellers involved in a property transaction.”
Natalia Sishodia, a New York foreign investment lawyer, emphasizes the significance of consulting with a professional adept in FIRPTA regulations. “A knowledgeable lawyer is indispensable in identifying eligible properties for foreign investment and in overcoming the regulatory challenges that often accompany foreign ownership,” she advises.
The article sheds light on the seller’s nationality status, which is a determinant factor in FIRPTA withholdings. It is imperative upon the buyer to determine whether the seller is a foreign person, as failure to withhold the appropriate taxes could result in the buyer being held liable. The seller’s status is evaluated based on the substantial presence test, which assesses physical presence within the U.S. over a specified period.
Additionally, the article provides essential guidance on preparing Tax Identification Numbers (TINs) well in advance of the home sale closing. Natalia Sishodia outlines the steps for foreign sellers, including the use of Social Security Numbers, the renewal of Individual Taxpayer Identification Numbers, and the acquisition of Employer Identification Numbers for entities.
The article also offers insight into exceptions to FIRPTA withholding, including cases where the property is acquired for personal residence and the sale price does not exceed $300,000. Furthermore, the issuance of withholding certificates by the IRS may also adjust the required withholding amounts, which is a process that typically takes 90-120 days upon the receipt of a complete application.
The comprehensive nature of the article underscores the necessity for due diligence and the engagement of seasoned legal counsel when dealing with FIRPTA-related matters. The New York foreign investment lawyer advises, “Given the complexity of FIRPTA rules and the potential risks buyers face, it is advisable to exercise caution on the side of withholding when in doubt.”
Readers are encouraged to delve into the full article for a deeper understanding of FIRPTA requirements and to gain insights on how to navigate the legal landscape effectively when selling a New York home as a non-citizen.
For those considering the sale or purchase of property in New York and seeking guidance on FIRPTA compliance, initiating a conversation with a dedicated legal professional is a proactive step towards ensuring a seamless transaction.
About Sishodia PLLC:
Sishodia PLLC is a New York-based law firm providing a range of services in the field of real estate law. The firm is committed to guiding clients through the intricacies of property investment, offering comprehensive legal counsel to both domestic and international clients. With a focus on personalized service and a thorough understanding of the legal landscape, Sishodia PLLC stands as a pillar of support for those navigating the complexities of real estate transactions and foreign investment.
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