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/u/bachekooni
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Looking to sell in Colorado in move into a bigger place, I've found a private buyer, one of my neighbors, who wants to buy the property for $205,000. We're hoping to close mid-January. The issue is that my parents are actually on the Title and they're Canadian citizens and non-residents of the US for tax purposes, meaning a FIRPTA withholding. We're selling the property for a small loss for what it's worth we purchased for $216k 2 years ago so there's no actual gain to tax.
The issue I'm coming across is I believe my neighbor wants to rent the place out, meaning from my understanding the exemption for under $300,000 properties doesn't apply.
I just want to make sure I understand everything correctly, that essentially this means that we'll have to either do the withholding or get an exemption certificate. My question is does the exemption certificate have to be processed before closing? It seems like it takes up to 120 days with 90 being the average turnaround time so certainly it won't be done before my closing date. If I process the exemption paperwork after the closing would that release the funds? My concern is that with the closing being in Jan '25, that we won't be able to get the return until Spring '26, meaning a 12+ month interest free loan to the government of approx $30,000.
I'm hoping I'm not stuck in the hard spot of either pushing my closing or eating the fact that the money is tied up that long, and thought somebody here might be able to confirm or deny.
submitted by /u/bachekooni
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FIRPTA Witholding Question
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The issue I'm coming across is I believe my neighbor wants to rent the place out, meaning from my understanding the exemption for under $300,000 properties doesn't apply.
I just want to make sure I understand everything correctly, that essentially this means that we'll have to either do the withholding or get an exemption certificate. My question is does the exemption certificate have to be processed before closing? It seems like it takes up to 120 days with 90 being the average turnaround time so certainly it won't be done before my closing date. If I process the exemption paperwork after the closing would that release the funds? My concern is that with the closing being in Jan '25, that we won't be able to get the return until Spring '26, meaning a 12+ month interest free loan to the government of approx $30,000.
I'm hoping I'm not stuck in the hard spot of either pushing my closing or eating the fact that the money is tied up that long, and thought somebody here might be able to confirm or deny.
submitted by /u/bachekooni
[link] [comments]
FIRPTA Witholding Question
Continue reading...