itonewbie
Level 15

Just to be clear, 15% as required since the PATH Act of 2015 is applicable unless the rental property being sold met the specific criteria for 10% under §1.1445-1(b)(2), which stipulates the following:

(i) The property is acquired by the transferee for use by the transferee as a residence;
(ii) the amount realized for the property does not exceed $1,000,000; and
(iii) section 1445(b)(5) does not apply to the disposition. See § 1.1445-2(d)(1).

If I understand you correctly, your client is the seller.  This means neither you nor your client would send the F.8288 or F.8288-A to the buyer or the IRS.  Completing and submitting these returns are the buyer's or his/her agent's responsibilities.  However, your client needs to make sure the buyer/agent has all the correct info, particular your client's foreign address because that's where the IRS will send the stamped Copy B of F.8288-A, without which your client will have problem getting credit for the withholding when he/she files the 1040NR.  Given the recent shutdown, extension for tax filing/remittance, and the backlog at the IRS, the processing time for these returns would likely be significantly prolonged.

I am aware that you are not looking at requesting a reduced withholding.  But if your client is eligible for one of the exceptions for reduced or exemption from withholdings, you should consider submitting a F.8288-B assuming the transaction has not yet closed unless your client feels like extending an interest free loan to Uncle Sam.  With the F.8288-B submitted, the buyer/agent will be obliged to keep the withholding in an escrow until the IRS issues the withholding certificate and any excess would then be refunded to your client at that time.

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Still an AllStar

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