If you’re a foreign national who has sold, or is preparing to sell, U.S. real property, understanding FIRPTA withholding is essential. The Foreign Investment in Real Property Tax Act (FIRPTA) requires a portion of your proceeds to be withheld at closing and remitted to the IRS. Navigating this process incorrectly can mean delayed funds, unexpected penalties, or a missed refund. Nolly’s IRS-certified specialists are here to make it simple.
The Foreign Investment in Real Property Tax Act (FIRPTA), codified under IRC Section 897 and amended by the PATH Act of 2015, is a U.S. federal law that requires foreign persons to pay U.S. income tax on gains from the sale of U.S. real property interests (USRPI).
Because the IRS cannot reliably collect taxes from sellers who reside outside the United States, FIRPTA places the collection burden on the buyer or a designated FIRPTA withholding agent who must withhold a percentage of the purchase price at closing and remit it directly to the IRS on the seller’s behalf.
This withheld amount functions as a prepayment toward any U.S. tax the foreign seller may owe. If the amount withheld exceeds the seller’s actual tax liability, the seller is entitled to a FIRPTA refund, but only after filing the correct U.S. tax return and supporting IRS documentation.
Confirm Your ITIN Is Valid
The IRS requires an active ITIN to process your tax return and issue any refund. If yours has expired or you never had one, we will apply for or renew it immediately.
Gather documents
We collect your sale contract, closing disclosure statement, purchase price and cost basis documentation, prior U.S. filings related to the property, and valid government identification.
Review Withholding Amount
We analyze whether the standard 15% was applied correctly, or whether a lower rate (or withholding certificate) should have reduced the amount. If excess withholding occurred, we document the overpayment.
Prepare Your U.S. Tax Return
We prepare your IRS Form 1040-NR (or 1120-F for corporations) to calculate your actual capital gains tax on the transaction, taking into account your adjusted cost basis, allowable deductions, and applicable treaty benefits.
File and Track
We submit all forms electronically where permitted and track your submission with the IRS until your refund is issued or your liability is confirmed.
Sellers who need an ITIN Number and need to claim a U.S. property tax refund.
Nolly's team holds active IRS Certifying Acceptance Agent (CAA) status, PTIN registration, and IRS e-File authorization. These credentials are not self-designated; they require background checks, continuing education, and regular renewal by the IRS. When you work with Nolly, you are working with professionals the IRS has vetted.
Many general tax preparers lack deep experience with FIRPTA. Our specialists focus specifically on non-resident property transactions and understand the nuances of withholding certificates, treaty positions, cost basis calculation for foreign-held properties, and coordination with U.S. closing agents.
You do not need to navigate IRS correspondence, understand form numbering, or coordinate with your buyer's settlement agent on your own. We handle it all and keep you updated.
No hourly billing. No surprise invoices. Our pricing is disclosed upfront, and our one-time fee covers your complete service engagement from intake through refund receipt.
Your personal identification documents, financial records, and tax information are handled with bank-grade encryption and strict data security standards. We never share your information with third parties other than for required IRS submissions.
Nolly works with clients across more than 30 countries and provides clear, accessible communication regardless of your primary language or time zone. A Nolly specialist responds to your inquiry within 24 business hours.
We prepare and submit your W-7 with full CAA identity certification. No need to mail your passport.
Obtain an Employer Identification Number for your U.S. business entity quickly and correctly.
Full preparation of Form 1040-NR or 1120-F for your U.S. property income or sale.
Set up a U.S. LLC or corporation for property holding or business operations.
Pre-closing application to reduce the FIRPTA withholding amount before funds are remitted to the IRS.
Important Disclaimer
Nolly provides document preparation assistance only and is not a law firm or tax advisor.
• We prepare forms and documents for submission
•The IRS makes all final decisions about approvals
• Consult a tax professional or attorney for advice
• Our guarantee covers service completion, not IRS approval outcomes
No. The 15% withheld under FIRPTA withholding is a prepayment, not the final tax. Your actual tax obligation is determined by filing a U.S. nonresident tax return. If your true capital gains tax is lower than the amount withheld (which is common), you are entitled to a refund of the difference.
The buyer, or their closing attorney, escrow officer, or settlement agent, acts as the FIRPTA withholding agent and is responsible for completing Forms 8288 and 8288-A and remitting the withheld funds to the IRS, typically within 20 days of the closing date.
Often, yes. If your expected U.S. tax on the gain is less than the standard 15% FIRPTA withholding amount, Nolly can apply for a withholding certificate (Form 8288-B) before or at closing. If approved, the IRS authorizes a lower withholding amount, reducing the funds taken from your proceeds.
Yes. An ITIN is required to file your U.S. tax return and to receive your copy of Form 8288-A (which the IRS uses to track your refund related to FIRPTA withholding). Without an ITIN, the IRS cannot process your refund. As an IRS Certifying Acceptance Agent, Nolly can verify your identification documents and apply for your ITIN without you mailing your passport.
IRS processing times vary. Refund timelines typically range from a few months to over a year, depending on the IRS’s workload, whether your return is selected for review, and whether all documentation was submitted the first time after FIRPTA withholding. Filing accurately and completely on the first attempt, which is Nolly’s standard, avoids delays caused by IRS requests for additional information.
Nolly will request your sale contract and closing disclosure, documentation of your original purchase price and improvement costs (cost basis), a copy of your government-issued photo ID, any prior U.S. tax returns or ITIN documents, and your Form 8288-A received from the FIRPTA withholding agent. We guide you through the process of collecting each item.
Yes. Even if the sale has already closed and you did not have an ITIN at the time, we can apply for your ITIN and file your U.S. return to recover any refund you are owed from FIRPTA withholding. There is a statute of limitations on refunds (generally three years from the return due date), so we recommend acting promptly.
It may. The United States has income tax treaties with many countries that can reduce or eliminate capital gains tax on U.S. property sales. However, treaty benefits are not automatic; they must be claimed on your U.S. tax return and, in some cases, affect the FIRPTA withholding rate as well. Nolly’s specialists evaluate treaty positions as part of our standard engagement.
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A specialist will review your situation and respond within 24 business hours. Whether you are preparing for an upcoming sale or have already closed and need to file, we are ready to help.
