Llc Or Trustee Declaration Required Prior To Signing Firpta Certification Of Nonforeign Status printable pdf download

Llc Or Trustee Declaration Required Prior To Signing Firpta Certification Of Nonforeign Status

LLC OR TRUSTEE DECLARATION

REQUIRED PRIOR TO SIGNING

FIRPTA CERTIFICATION OF NONFOREIGN STATUS

Section 1445 of the Internal Revenue Code (the “Code”) provides that a transferee (buyer)

of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. If

Seller is an entity or a trustee of a trust, Seller will not be able to provide Buyer with the

appropriate FIRPTA Certification of Nonforeign Status UNLESS its tax advisor first makes a

determination on whether or not Seller is a “disregarded entity” or whether the trust is a “grantor

trust” for tax purposes. In order for Seller to have filed its last federal income tax return, its tax

advisor would have been required to ascertain the facts and arrive at a decision on (i) whether

the Seller-Entity was a “disregarded entity” or (ii) whether the Seller-Trustee was a trustee of a

“grantor trust”. Therefore, Seller hereby certifies that it has consulted with its tax advisor and

the following information is provided to Buyer (through escrow) after consultation with its tax

advisor:

Legal title to the U.S. real property interest is in the name of:

(hereinafter referred to as the “Legal Owner”).

(This answer must be consistent with the preliminary title report.)

* * * * * * * * * * * * * * * * *

LLC

A disregarded entity may not certify that it is a transferor of a U. S. real property interest,

as the disregarded entity is NOT the transferor for U. S. tax purposes, including Code §§897,

1031 and 1445. Rather, the owner of the disregarded entity is treated as the transferor of

property and must provide a certificate of non-foreign status to avoid withholding under Code

§1445.

Therefore, in order for a selling entity to determine how to sign the FIRPTA

Certification of Nonforeign Seller for Buyer, Seller’s tax advisor must determine whether or not

the Seller is a “disregarded entity” under Treasury Regulation §1.1445-2(b)(2)(iii).

Legal Owner hereby certifies that it has consulted with its tax advisor and after such

consultation, both the Legal Owner and its tax advisor has determined that the Legal

Owner is:

(check & initial one of two choices.)

____ [ ]

A disregarded entity defined in Treasury Regulation §1.1445-2(b)(2)(iii) and the

owner of the disregarded entity is

(the “Transferor”).

____ [ ]

NOT a disregarded entity defined in Treasury Regulation §1.14452(b)(2)(iii) and,

therefore, filed a separate federal income tax return Form ___________.

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Llc Or Trustee Declaration Required Prior To Signing Firpta Certification Of Nonforeign Status