Real Estate Purchase from Non Resident Alien

Technical topics regarding tax preparation.
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Married taxpayers have entered into an escrow to purchase residential real estate from 2 taxpayers having the same last name. The selling taxpayers have provided FIRPTA certifications stating that one of the sellers is either a citizen or resident alien, and the other seller is a non-resident alien. Social Security and ITIN numbers have not been provided on the FIRPTA certifications.

The following questions refer to the correct preparation of Form 8288, and withholding of income taxes from the sellers, as provided by IRC section 1445.

Facts- The acquisition price of the property is between $500,000 and $600,000.

Question 1- If the sellers file a joint individual tax return, are the sellers, US resident taxpayers, and is any withholding required?

Question 2- If the sellers file separate tax returns, assuming 50% ownership by each selling taxpayer, how much withholding is required considering the following scenarios?

A- Is 50% of the selling price, which is an amount less than $300,000, exempt from withholding from the selling taxpayer who is a citizen or resident alien?

B- Is 50% of the selling price, which is an amount less than $300,000, exempt from withholding from the selling taxpayer who is a non-resident alien, exempt from withholding because the seller's share of the selling price is meets the test under IRC Section 1445(b)(5)(B)?
 

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