8/08/2008

"The FIRPTA Fix"--HERA of 2008


What this fix means under the Housing and Economic Recovery Act, much to the relief of sellers everywhere, is that the seller is no longer required to provide the seller's Social Security number to the buyer in order to fulfill the IRS requirements when selling property. The new option is to provide that on a form to escrow or "qualified substitute" who in turn povides a statement to the buyer. This, by the way, comes under the Foreign Investment in Real Property Tax Act, otherwise known as "FIRPTA", and sometimes I find it searched for as "ferpta" (just a little side note if you want to find it under the right acronym). Although California buyers are currently required to sign a Realtor-based FIRPTA form saying the seller's Social Security number will in no way be misused or abused, obviously there is less exposure by only providing it to the qualified 3rd party, or escrow officer.
Per California Association of Realtors: "The federal withholding law is now similar to California's Franchise Tax Board (FTB) policy which allows the escrow officer to remove the seller's tax ID number from the buyer's copy of the California withholding tax statement, but not other copies."

No comments:

LinkWithin

Related Posts Plugin for WordPress, Blogger...
Web Statistics