Effective NOVEMBER 4, 2003, the IRS will require that foreign sellers have a Tax Identification Number (TIN) at the time they apply for a Withholding Certificate OR when the 10% withholding is submitted to the IRS. It further requires that foreign buyers purchasing from foreign sellers must also have a “TIN” to provide to the seller (in the case where the seller files a withholding certificate).
· I have a foreign seller wanting to list their property. What do I need to do?
You must require to the foreign seller’s TIN at the time the property is listed.
· My foreign seller wants to apply for a Withholding Certificate (to allow for withholding of LESS than the 10%) Do they need to have a TIN at the time they file the Withholding Certificate Application?
· What if my seller chooses not to apply for a TIN as required by the IRS?
The 10% withheld at the time of closing will NEVER be returned to the seller, nor will it be applied toward any taxes owed.
· I have a foreign buyer that is purchasing property from a US citizen. Does my buyer need to have a “TIN”?
No. However, it would be wise to advise your clients to apply for one so there is no delay when they decide to sell the property.
· My foreign buyer is purchasing property from a foreign seller. Does my buyer need to have a “TIN”?
· How does my client apply for the “TIN”?
They must complete IRS form W-7 at http://www.irs.gov/pub/irs-pdf/fw7.pdf found on the IRS.gov website.
If you have any questions, feel free to contact Laura Bowers with MSC Title at 941.552.5211 or email her at: laurabowers@msctitle.com.
307 S. Orange Ave. - Sarasota, FL 34236 - 941.552-5211 - Fax: 941.552-5210
www.msctitle.com