Instructions For Form 8288 - U.s. Withholding Tax Return For Dispositions By Foreign Persons Of U.s. Real Property Interests

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Instructions for Form 8288
Department of the Treasury
Internal Revenue Service
(Rev. February 2017)
U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real
Property Interests
Section references are to the Internal Revenue
Form 8288 to report and transmit the
Withholding at 35%, see
Entities
Code unless otherwise noted.
amount withheld. If two or more persons
Subject to Section
1445(e), later.
are joint transferees, each is obligated
Withholding at a reduced amount,
Future Developments
to withhold. However, the obligation of
see
Purchase of residence for
For the latest information about
each will be met if one of the joint
$1,000,000 or
less.
developments related to Form 8288 and
transferees withholds and transmits the
For information about applying for
its instructions, such as legislation
required amount to the IRS.
reduction or elimination of withholding
enacted after they were published, go to
see
Withholding certificate issued by the
Do not use Forms 8288 and 8288-A
for the following distributions.
IRS, later.
What's New
1. A distribution of effectively
Joint transferors. If one or more
connected income by a publicly traded
foreign persons and one or more U.S.
We made the following changes to the
partnership is subject to the withholding
persons jointly transfer a U.S. real
prior version of Form 8288.
requirements of section 1446.
property interest, you must determine
Added a line at the top of the form to
the amount subject to withholding in the
2. A distribution with respect to
indicate the Form 8288 filed is an
following manner.
gains from the disposition of a U.S. real
amended return.
property interest from a trust that is
Deleted old line 5, Part I, as the
1. Allocate the amount realized from
regularly traded on an established
amount realized will be reported on new
the transfer among the transferors
securities market is subject to section
line 5a, and/or 5b.
based on their capital contribution to the
1445, but is not reported on Forms 8288
On line 5, Part II, we rearranged the
property. For this purpose, a husband
and 8288-A.
withholding rates to better reflect the
and wife are treated as having
types of transactions reported on Form
contributed 50% each.
3. A dividend distribution by a
8288.
qualified investment entity to a
2. Withhold on the total amount
The blank line to the right of line 5d,
nonresident alien or a foreign
allocated to foreign transferors.
Part II, has been replaced with a check
corporation that is attributable to gains
3. Credit the amount withheld
box, by which the filer will indicate that
from sales or exchanges by the qualified
among the foreign transferors as they
the withholding is at a reduced rate. The
investment entity of U.S. real property
mutually agree. The transferors must
amount of such withholding is included
interests is not subject to withholding
request that the withholding be credited
in the total on line 6, Part II.
under section 1445 as a gain from the
as agreed upon by the 10th day after
sale or exchange of a U.S. real property
the date of transfer. If no agreement is
General Instructions
interest if:
reached, credit the withholding by
a. The distribution is on stock
Purpose of Form
evenly dividing it among the foreign
regularly traded on a securities market
transferors.
A withholding obligation under section
in the United States, and
1445 is generally imposed on the buyer
When To File
b. The alien or corporation did not
or other transferee (withholding agent)
A transferee must file Form 8288 and
own more than 10% (for dispositions
when a U.S. real property interest is
transmit the tax withheld to the IRS by
and distributions before December 17,
acquired from a foreign person. The
the 20th day after the date of transfer.
2015, did not own more than 5% of such
withholding obligation also applies to
stock in case of a real restate
foreign and domestic corporations,
You must withhold even if an
investment trust (REIT)) of that stock at
qualified investment entities, and the
application for a withholding certificate
any time during the 1-year period
fiduciary of certain trusts and estates.
is or has been submitted to the IRS on
ending on the date of the distribution.
This withholding serves to collect U.S.
the date of transfer. However, you do
tax that may be owed by the foreign
not have to file Form 8288 and transmit
Use Form 1042, and Form 1042-S, to
person. Use Form 8288 to report and
the withholding until the 20th day after
report and pay over the withheld
transmit the amount withheld.
the day the IRS mails you a copy of the
amounts.
withholding certificate or notice of
If an exception applies, you may
Amount To Withhold
denial. But, if the principal purpose for
be required to withhold at a
TIP
filing the application for a withholding
Generally, you must withhold 15% of the
reduced rate, or you may not be
certificate was to delay paying the IRS
amount realized on the disposition by
required to withhold. See Exceptions,
the amount withheld, interest and
the transferor (see Definitions, later).
later.
penalties will apply to the period
Note. Prior to February 17, 2016, the
beginning on the 21st day after the date
Who Must File
transferor was generally required to
of transfer and ending on the day full
A buyer or other transferee of a U.S.
withhold 10% of the amount realized on
payment is made.
real property interest, and a corporation,
the disposition.
Installment payments. You must
qualified investment entity, or fiduciary
For information about:
withhold the full amount at the time of
that is required to withhold tax, must file
the first installment payment. If you
Jan 13, 2017
Cat. No. 57528F

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