FIRPTA Clauses: Contract for Real Property

• Category: Contracts - Clauses
• State: Multi-State
• Control #: US-C-CL-655-1
• Format: Word; Rich Text

Description

A clause dictates the conditions under which the contract is legally enforceable and determines the terms of the contract. Contracts often contain boilerplate clauses or standard clauses found across most contracts. These standard clauses do not require a lot of negotiation. Included is a Sample FIRPTA Clauses for a Contract for Real Property. The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding. FIRPTA authorized the United States to tax foreign persons on dispositions of U.S. real property interests.

F.I.R.P.T.A. Clauses: Contract for Real Property is a set of clauses outlined in the Foreign Investment in Real Property Tax Act (FIR PTA) that is used in contracts for real estate sales. It is designed to help protect foreign investors by providing transparency and clarity regarding the taxation of their investment. These clauses are used to ensure that the foreign investor will be subject to the laws and regulations of the United States with respect to taxation of their investment. There are two types of F.I.R.P.T.A. Clauses: Contract for Real Property: 1. Withholding Clause: This clause requires that the buyer withhold 10% of the purchase price from the seller, unless the seller is exempt from the FIR PTA withholding requirements. 2. Identification Clause: This clause requires that the seller provide the buyer with a valid taxpayer identification number, or a written statement from the Internal Revenue Service that the seller is exempt from the tax withholding requirements.