Real Estate Transaction / W9

Technical topics regarding tax preparation.
#1
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Orange County
Dear Pro's,

My client is selling a piece of land. The buyer is requesting a W9. Any reason why the buyer would do such a thing?

Thank you!
 

#2
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The Office
Buyer might need to issue a 1099-S depending on the facts?
 

#3
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West
Because if the seller is not a US person, the buyer must withhold 15% of the purchase price under the FIRPTA rules.
 

#4
Keyad22  
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Bay Area, California
If the seller is not a US person, should the buyer ask for a W-8ben?
 

#5
Keyad22  
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However, withholding is required on sales or transfers of California real property when the sales price exceeds $100,000 and does not qualify for an exemption. In California all transferees (buyers) are required to withhold 3 1/3% of the total sales price unless exempt by reasons listed by regulation.

Form 593 series.
 

#6
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Pacific Northwest
Keyad22 wrote:If the seller is not a US person, should the buyer ask for a W-8ben?


Actually a W8-BEN is not necessary. The transferee only needs to ascertain whether the seller is a US Person by receiving a signed W-9 or substitute thereof - but if the seller does NOT provide such certification then the transferee's only obligation is to withhold and remit tax under Sec. 1445. There if NO obligation or concept of certifying foreign status in this case and there is no need for the foreign seller to provide an ITIN either. It probably sounds semantic but it actually means "when in doubt, withhold".
 

#7
novacpa  
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Keyad22 wrote:However, withholding is required on sales or transfers of California real property when the sales price exceeds $100,000 and does not qualify for an exemption. In California all transferees (buyers) are required to withhold 3 1/3% of the total sales price unless exempt by reasons listed by regulation.

Form 593 series.


New York State requires mandatory State Income Tax Withholding by the Title Agent at Closing (8.8% of Net Sales Price) - so does Maryland.
 


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