If you are a non-U.S. resident selling real estate in the United States, you may be required to pay a significant upfront tax withholding under FIRPTA (Foreign Investment in Real Property Tax Act).
Many sellers are surprised to learn that up to 15% of the sales price—not the profit—is withheld at closing. Without proper planning, this can result in tens or even hundreds of thousands of dollars being withheld unnecessarily.
The good news? With the right CPA guidance, you may be able to reduce or optimize your FIRPTA withholding legally.
What is FIRPTA Withholding?
FIRPTA requires buyers to withhold a portion of the purchase price when buying U.S. real estate from a foreign seller and remit it to the IRS.
- Standard withholding rate: 15% of gross sales price
- Filed using: Form 8288
- Potential reduction: Form 8288-B (Withholding Certificate Application)
This withholding is not your final tax liability—it is only a prepayment.
Common Mistakes Foreign Sellers Make
Many sellers lose money or face delays because of:
❌ Not knowing FIRPTA applies until closing
❌ Missing the opportunity to apply for reduced withholding
❌ Incorrect or late filing of Form 8288 / 8288-B
❌ Overpaying withholding and waiting months for IRS refunds
❌ Lack of coordination between escrow, CPA, and agents
How We Help You Save Money
At Cao & Associates, we specialize in FIRPTA withholding and help clients across the U.S.
✅ FIRPTA Withholding Planning
We review your transaction early and determine if you qualify for reduced withholding.
✅ Reduce Withholding (Form 8288-B)
We prepare and file withholding certificate applications to legally reduce the amount withheld at closing.
✅ Accurate Filing (Form 8288)
We ensure all filings are completed correctly and on time to avoid IRS issues.
✅ End-to-End Support
We coordinate with your escrow officer, real estate agent, and closing timeline to ensure a smooth transaction.
Why Choose Cao & Associates?
✔ Specialized in FIRPTA and cross-border tax
✔ Experience with non-resident real estate transactions
✔ Fast, accurate filing to meet closing deadlines
✔ Bilingual service (English & Chinese)
✔ Serving clients nationwide across all 50 states
When Should You Contact a CPA?
As early as possible—before closing.
FIRPTA reduction must be applied before or at closing, and timing is critical. Waiting too late may result in full withholding.
Contact Us
If you are selling U.S. real estate and want to avoid overpaying FIRPTA withholding, contact us today:
Cao & Associates
📱 WeChat: WACPA1
📞 Phone: 425-230-7538 / 425-336-8675
📧 Email: info@caoandassociates.net
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