IRS Forms - 8288 - U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests by sammyc2007

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									                                                   U.S. Withholding Tax Return for
Form    8288
(Rev. November 2006)
                                                  Dispositions by Foreign Persons of                                                                  OMB No. 1545-0902
Department of the Treasury
Internal Revenue Service
                                                     U.S. Real Property Interests
                     Complete Part I or Part II. Also complete and attach Copies A and B of Form(s) 8288-A.
                                        (Attach additional sheets if you need more space.)
Part I           To Be Completed by the Buyer or Other Transferee Required To Withhold Under Section 1445(a)
 1      Name of buyer or other transferee responsible for withholding (see page 6)                                       Identifying number

        Street address, apt. or suite no., or rural route. Do not use a P.O. box.

        City or town, state, and ZIP code                                                                                Phone number (optional)
                                                                                                                         (      )
 2      Description and location of property acquired

 3      Date of transfer                                     4    Number of Forms 8288-A attached                        5     Amount realized on the transfer

 6      Check applicable box.                                                                                            7     Amount withheld
    a Withholding is at 10%
    b Withholding is of a reduced amount

Part II          To Be Completed by an Entity Subject to the Provisions of Section 1445(e)
 1      Name of entity or fiduciary responsible for withholding (see instructions)                                       Identifying number

        Street address, apt. or suite no., or rural route. Do not use a P.O. box.

        City or town, state, and ZIP code                                                                                Phone number (optional)
                                                                                                                         (      )
 2      Description of U.S. real property interest transferred or distributed

3       Date of transfer                                                                                                 4     Number of Forms 8288-A attached

5       Complete all items that apply.                                                                                   6     Total amount withheld
     a Amount subject to withholding at 35%
    b Amount subject to withholding at 10%
     c Amount subject to withholding at reduced rate
     d Large trust election to withhold at distribution
                 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge
                 and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
                      Signature of withholding agent, partner, fiduciary, or corporate officer                    Title (if applicable)                          Date
                                                                                                 Date                                        Preparer’s SSN or PTIN
Paid             Preparer’s                                                                                              Check if self-
                 signature                                                                                               employed
Preparer’s       Firm’s name (or                                                                                         EIN
Use Only         yours if self-employed)
                                                                                                                         ZIP code
                 and address
For Privacy Act and Paperwork Reduction Act Notice, see the instructions.                                Cat. No. 62260A                       Form   8288    (Rev. 11-2006)
Form 8288 (Rev. 11-2006)                                                                                                         Page   2
Section references are to the Internal         Amount To Withhold                             Where To File
Revenue Code unless otherwise noted.           Generally, you must withhold 10% of the        If you are filing in 2006, send Form 8288
                                               amount realized on the disposition by          with the amount withheld, and Copies A
General Instructions                           the transferor (see Definitions on             and B of Form(s) 8288-A to Internal
                                               page 3).                                       Revenue Service, Philadelphia, PA
Purpose of Form
                                                  See Entities Subject to Section 1445(e)     19255. If you are filing after 2006, send
A withholding obligation under section         on page 5 for information about when           Form 8288 with the amount withheld,
1445 is generally imposed on the buyer         withholding at 35% is required. Also see       and copies A and B of Form(s) 8288-A
or other transferee (withholding agent)        Withholding certificate issued by the IRS      to the Ogden Service Center,
when a U.S. real property interest is          on page 4 for information about applying       P.O. Box 409101, Ogden, UT 84409.
acquired from a foreign person. The            for reduction or elimination of
withholding obligation also applies to         withholding.                                   Forms 8288-A Must Be
foreign and domestic corporations,                                                            Attached
qualified investment entities, and the         Joint transferors. If one or more foreign
fiduciary of certain trusts and estates.       persons and one or more U.S. persons           Anyone who completes Form 8288 must
This withholding serves to collect U.S.        jointly transfer a U.S. real property          also complete a Form 8288-A,
tax that may be owed by the foreign            interest, you must determine the amount        Statement of Withholding on
person. Use this form to report and            subject to withholding in the following        Dispositions by Foreign Persons of U.S.
transmit the amount withheld.                  manner.                                        Real Property Interests, for each person
                                                  1. Allocate the amount realized from        subject to withholding. Copies A and B
            You are not required to                                                           of Form 8288-A must be attached to
                                               the transfer among the transferors based
   TIP withhold if any of the on
            Exceptions (which begin            on their capital contribution to the           Form 8288. Copy C is for your records.
            page 3) apply.                     property. For this purpose, a husband             After receipt of Form 8288 and
                                               and wife are treated as having                 Form(s) 8288-A, the IRS will stamp Copy
Who Must File                                  contributed 50% each.                          B of Form 8288-A to show receipt of the
A buyer or other transferee of a U.S. real        2. Withhold on the total amount             withholding and will forward the
property interest, and a corporation,          allocated to foreign transferors.              stamped copy to the foreign person
qualified investment entity, or fiduciary                                                     subject to withholding at the address
                                                  3. Credit the amount withheld among         shown on Form 8288-A.
that is required to withhold tax, must file    the foreign transferors as they mutually
Form 8288 to report and transmit the           agree. The transferors must request that          You are not required to furnish a copy
amount withheld. If two or more persons        the withholding be credited as agreed          of Form 8288 or 8288-A directly to the
are joint transferees, each is obligated to    upon by the 10th day after the date of         transferor. To receive credit for the
withhold. However, the obligation of           transfer. If no agreement is reached,          withheld amount, the transferor generally
each will be met if one of the joint           credit the withholding by evenly dividing      must attach the stamped Copy B of
transferees withholds and transmits the        it among the foreign transferors.              Form 8288-A to a U.S. income tax return
required amount to the IRS.                                                                   (for example, Form 1040NR or 1120-F)
   Do not use Forms 8288 and 8288-A            When To File                                   or application for early refund filed with
for the following distributions.                                                              the IRS.
                                               A transferee must file Form 8288 and
   1. A distribution of effectively            transmit the tax withheld to the IRS by                   You are required to include
connected income by a publicly traded          the 20th day after the date of transfer.                  the taxpayer identification
partnership is subject to the withholding          You must withhold even if an                          numbers (TIN) of the transferor
requirements of section 1446.                                                                  CAUTION and transferee on Forms 8288
                                               application for a withholding certificate is
   2. A distribution from a trust that is      or has been submitted to the IRS on the        and 8288-A. A stamped copy of Form
regularly traded on an established             date of transfer. However, you do not          8288-A will not be provided to the
securities market is subject to section        have to file Form 8288 and transmit the        transferor if the transferor’s TIN is not
1445, but is not reported on Forms 8288        withholding until the 20th day after the       included on that form. In this case, to
and 8288-A.                                    day the IRS mails you a copy of the            get credit for the withheld amount, the
   3. A distribution by a qualified            withholding certificate or notice of           transferor must attach to its U.S. income
investment entity to a nonresident alien       denial. But if the principal purpose for       tax return substantial evidence of
or a foreign corporation is treated as a       filing the application for a withholding       withholding (for example, closing
dividend and is not subject to                 certificate was to delay paying the IRS        documents) and a statement that
withholding under section 1445 as a            the amount withheld, interest and              contains all the required information on
gain from the sale or exchange of a U.S.       penalties will apply to the period after       Forms 8288 and 8288-A including the
real property interest if:                     the 20th day after the date of transfer.       transferor’s TIN.
   a. The distribution is on stock regularly   Installment payments. You must
traded on a securities market in the           withhold the full amount at the time of        Penalties
United States, and                             the first installment payment. If you          Under section 6651, penalties apply for
   b. The alien or corporation did not         cannot because the payment does not            failure to file Form 8288 when due and
own more than 5% of that stock at any          involve sufficient cash or other liquid        for failure to pay the withholding when
time during the 1-year period ending on        assets, you may obtain a withholding           due. In addition, if you are required to
the date of the distribution.                  certificate from the IRS. See the              but do not withhold tax under section
   Use Form 1042, Annual Withholding           instructions for Form 8288-B,                  1445, the tax, including interest, may be
Tax Return for U.S. Source Income of           Application for Withholding Certificate        collected from you. Under section 7202,
Foreign Persons, and Form 1042-S,              for Dispositions by Foreign Persons of         you may be subject to a penalty of up to
Foreign Person’s U.S. Source Income            U.S. Real Property Interests, for more         $10,000 for willful failure to collect and
Subject to Withholding, to report and          information.                                   pay over the tax. Corporate officers or
pay over the withheld amounts.                                                                other responsible persons may be
                                                                                              subject to a penalty under section 6672
                                                                                              equal to the amount that should have
                                                                                              been withheld and paid over to the IRS.
Form 8288 (Rev. 11-2006)                                                                                                           Page   3

Definitions                                    ● A regulated investment company (RIC)            This exception applies whether or not
                                               that is a U.S. real property holding           the transferor (seller) is an individual,
Transferee. Any person, foreign or             corporation.                                   partnership, trust, corporation, or other
domestic, that acquires a U.S. real                                                           transferor. However, this exception does
                                                  For more information, see Pub. 515.
property interest by purchase, exchange,                                                      not apply if the actual transferee (buyer)
gift, or any other transfer.                   Domestically controlled qualified              is not an individual, even if the property
                                               investment entity. A qualified                 is acquired for an individual.
Transferor. For purposes of this
                                               investment entity is domestically
withholding, this means any foreign                                                              2. Transferor not a foreign person.
                                               controlled if at all times during the
person that disposes of a U.S. real                                                           You receive a certification of nonforeign
                                               testing period less than 50% in value of
property interest by sale, exchange, gift,                                                    status from the transferor, signed under
                                               its stock was held, directly or indirectly,
or any other disposition. A disregarded                                                       penalties of perjury, stating that the
                                               by foreign persons. The testing period is
entity cannot be the transferor for                                                           transferor is not a foreign person and
                                               the shorter of (a) the 5-year period
purposes of section 1445. Instead, the                                                        containing the transferor’s name,
                                               ending on the date of the disposition (or
person considered as owning the assets                                                        address, and identification number
                                               distribution), or (b) the period during
of the disregarded entity for federal tax                                                     (social security number (SSN) or
                                               which the entity was in existence.
purposes is regarded as the transferor.                                                       employer identification number (EIN)). If
A disregarded entity for these purposes        Amount realized. The sum of the cash           you receive a certification, the
means an entity that is disregarded as         paid or to be paid (not including interest     withholding tax cannot be collected from
an entity separate from its owner under        or original issue discount), the fair          you unless you knew that the
Regulations section 301.7701-3, a              market value of other property                 certification was false or you received a
qualified real estate investment trust         transferred or to be transferred, and the      notice from your agent or the
subsidiary as defined in section 856(i), or    amount of any liability assumed by the         transferor’s agent that it was false. The
a qualified subchapter S subsidiary            transferee or to which the U.S. real           certification must be signed by the
under section 1361(b)(3)(B).                   property interest is subject immediately       individual, a responsible officer of a
                                               before and after the transfer. Generally,      corporation, a general partner of a
Withholding agent. For purposes of this        the amount realized for purposes of this
return, this means the buyer or other                                                         partnership, or the trustee, executor, or
                                               withholding is the sales or contract           fiduciary of a trust or estate.
transferee who acquires a U.S. real            price.
property interest from a foreign person.                                                         A disregarded entity may not certify
                                               Date of transfer. The first date on which
Foreign person. A nonresident alien                                                           that it is the transferor for U.S. tax
                                               consideration is paid or a liability is
individual, a foreign corporation that                                                        purposes, including sections 897 and
                                               assumed by the transferee. However, for
does not have a valid election under                                                          1445. Rather, the owner of the
                                               purposes of sections 1445(e)(2), (3), and
section 897(i) to be treated as a                                                             disregarded entity is treated as the
                                               (4), and Regulations sections
domestic corporation, a foreign                                                               transferor of the property and must
                                               1.1445-5(c)(1)(iii) and 1.1445-5(c)(3), the
partnership, a foreign trust, or a foreign                                                    provide the certificate of nonforeign
                                               date of transfer is the date of distribution
estate. A resident alien individual is not                                                    status to avoid withholding under
                                               that creates the obligation to withhold.
a foreign person.                                                                             section 1445.
                                               Payment of consideration does not
U.S. real property interest. Any               include the payment before passage of             A foreign corporation electing to be
interest, other than an interest solely as     legal or equitable title of earnest money      treated as a domestic corporation under
a creditor, in:                                (other than pursuant to an initial             section 897(i) must attach to the
                                               purchase contract), a good-faith deposit,      certification a copy of the
   1. Real property located in the United
                                               or any similar amount primarily intended       acknowledgment of the election received
States or the U.S. Virgin Islands.
                                               to bind the parties to the contract and        from the IRS. The acknowledgment must
   2. Certain personal property                subject to forfeiture. A payment that is       state that the information required by
associated with the use of real property.      not forfeitable may also be considered         Regulations section 1.897-3 has been
   3. A domestic corporation, unless it is     earnest money, a good-faith deposit, or        determined to be complete. If the
shown that the corporation was not a           a similar sum.                                 acknowledgment is not attached, you
U.S. real property holding corporation                                                        may not rely on the certification. Keep
during the previous 5 years (or during         Exceptions                                     any certification of nonforeign status you
the period in which the transferor held        You are not required to withhold if any        receive in your records for 5 years after
the interest, if shorter).                     of the following applies.                      the year of transfer.
   A U.S. real property interest does not         1. Purchase of residence for                   You may also use other means to
include:                                       $300,000 or less. One or more                  determine that the transferor is not a
                                               individuals acquire U.S. real property for     foreign person. But if you do, and it is
   1. An interest in a domestically                                                           later determined that the transferor is a
controlled qualified investment entity.        use as a residence and the amount
                                               realized (sales price) is not more than        foreign person, the withholding tax may
   2. An interest in a corporation that has                                                   be collected from you.
                                               $300,000. A U.S. real property interest is
disposed of all its U.S. real property                                                           Late notice of false certification. If,
                                               acquired for use as a residence if you or
interests in transactions in which the full                                                   after the date of transfer, you receive a
                                               a member of your family has definite
amount of any gain was recognized as                                                          notice from your agent or the
                                               plans to reside in the property for at
provided in section 897(c)(1)(B).                                                             transferor’s agent that the certification of
                                               least 50% of the number of days the
   3. An interest in certain publicly traded   property is used by any person during          nonforeign status is false, you do not
corporations, partnerships, and trusts.        each of the first two 12-month periods         have to withhold on consideration paid
   See Regulations sections 1.897-1 and        following the date of transfer. Do not         before you received the notice. However,
-2 for more information. Also see              take into account the number of days           you must withhold the full 10% of the
Transferred property that is not a U.S.        the property will be vacant in making          amount realized from any consideration
real property interest on page 4.              this determination. No form or other           that remains to be paid, if possible. You
                                               document is required to be filed with the      must do this by withholding and paying
Qualified investment entity. A qualified                                                      over the entire amount of each
                                               IRS for this exception; however, if you
investment entity is:                                                                         successive payment of consideration
                                               do not in fact use the property as a
● A real estate investment trust (REIT),       residence, the withholding tax may be          until the full 10% has been withheld and
and                                            collected from you.
Form 8288 (Rev. 11-2006)                                                                                                        Page   4
paid to the IRS. These amounts must be        Note. A notice of nonrecognition cannot          For rules that apply to foreclosures,
reported and transmitted to the IRS by        be used for the exclusion from income         see Regulations section 1.1445-2(d)(3).
the 20th day following the date of each       under section 121, like-kind exchanges           9. Applicable wash sale transaction.
payment.                                      that do not qualify for nonrecognition        A distribution from a domestically
   3. Transferred property that is not a      treatment in their entirety, and deferred     controlled qualified investment entity is
U.S. real property interest. You acquire      like-kind exchanges that have not been        treated as a distribution of a U.S. real
an interest in property that is not a U.S.    completed when it is time to file Form        property interest only because an
real property interest (defined on page       8288. In these cases, a withholding           interest in the entity was disposed of in
3). A U.S. real property interest includes    certificate issued by the IRS, as             an applicable wash sale transaction. See
certain interests in U.S. corporations, as    described next, must be obtained.             section 897(h)(5).
well as direct interests in real property        5. Withholding certificate issued by
and certain associated personal               the IRS. A withholding certificate may        Liability of Agents
property.                                     be issued by the IRS to reduce or             If the transferee or other withholding
   No withholding is required on the          eliminate withholding on dispositions of      agent has received (a) a transferor’s
acquisition of an interest in a domestic      U.S. real property interests by foreign       certification of nonforeign status or (b) a
corporation if (a) any class of stock of      persons. Either a transferee or transferor    corporation’s statement that an interest
the corporation is regularly traded on an     may apply for the certificate. The            is not a U.S. real property interest, and
established securities market, or             certificate may be issued if:                 the transferee’s or transferor’s agent
(b) the transferee receives a statement          a. Reduced withholding is appropriate      knows that the document is false, the
by the corporation that the interest is not   because the 10% or 35% amount                 agent must provide notice to the
a U.S. real property interest, unless you     exceeds the transferor’s maximum tax          transferee or other withholding agent. If
know that the statement is false or you       liability,                                    the notice is not provided, the agent will
receive a notice from your agent or the          b. The transferor is exempt from U.S.      be liable for the tax that should have
transferor’s agent that the statement is      tax or nonrecognition provisions apply,       been withheld, but only to the extent of
false. A corporation’s statement may be       or                                            the agent’s compensation from the
relied on only if it is dated not more than      c. The transferee or transferor enters     transaction.
30 days before the date of transfer.          into an agreement with the IRS for the           If you are the transferee or withholding
   Late notice of false statement. If,        payment of the tax.                           agent and you receive a notice of false
after the date of transfer, you receive a        An application for a withholding           certification or statement from your
notice that an interest in a corporation is   certificate must comply with the              agent or the transferor’s agent, you must
not a U.S. real property interest is false,   provisions of Regulations sections            withhold tax as if you had not received a
see Late notice of false certification on     1.1445-3 and 1.1445-6 and Rev. Proc.          certification or statement. But see Late
page 3.                                       2000-35, 2000-35 I.R.B. 211. You can          notice of false certification on page 3.
   Generally, no withholding is required      find Rev. Proc. 2000-35 on page 211 of           The terms “transferor’s agent” and
on the acquisition of an interest in a        Internal Revenue Bulletin 2000-35 at          “transferee’s agent” mean any person
foreign corporation. However,               who represents the transferor or
withholding may be required if the            In certain cases, you may use                 transferee in any negotiation with
foreign corporation has made the              Form 8288-B to apply for a withholding        another person (or another person’s
election under section 897(i) to be           certificate. The IRS will normally act on     agent) relating to the transaction or in
treated as a domestic corporation.            an application by the 90th day after a        settling the transaction. For purposes of
   4. Transferor’s nonrecognition of          complete application is received.             section 1445(e), a transferor’s or
gain or loss. You may receive a notice           If you receive a withholding certificate   transferee’s agent is any person who
from the transferor signed under              from the IRS that excuses withholding,        represents or advises an entity, a holder
penalties of perjury stating that the         you are not required to file Form 8288.       of an interest in an entity, or a fiduciary
transferor is not required to recognize       However, if you receive a withholding         with respect to the planning,
gain or loss on the transfer because of a     certificate that reduces (rather than         arrangement, or completion of a
nonrecognition provision of the Internal      eliminates) withholding, there is no          transaction described in sections
Revenue Code (see Temporary                   exception to withholding, and you are         1445(e)(1) through (4).
Regulations section 1.897-6T(a)(2)) or a      required to file Form 8288. Attach a             A person is not treated as an agent if
provision in a U.S. tax treaty. You may       copy of the withholding certificate to        the person only performs one or more of
rely on the transferor’s notice unless        Form 8288. See When To File on page 2         the following acts in connection with the
(a) only part of the gain qualifies for       for more information.                         transaction:
nonrecognition or (b) you know or have           6. No consideration paid. The                 1. Receiving and disbursing any part
reason to know that the transferor is not     amount realized by the transferor is zero     of the consideration.
entitled to the claimed nonrecognition        (for example, the property is transferred
treatment.                                                                                     2. Recording any document.
                                              as a gift and the recipient does not
   No particular form is required for this    assume any liabilities or furnish any            3. Typing, copying, and other clerical
notice. By the 20th day after the date of     other consideration to the transferor).       tasks.
transfer, you must send a copy of the            7. Options to acquire U.S. real               4. Obtaining title insurance reports
notice of nonrecognition (with a cover        property interests. An amount is              and reports concerning the condition of
letter giving your name, address, and         realized by the grantor on the grant or       the property.
identification number) to the Director,       lapse of an option to acquire a U.S. real       5. Transmitting documents between
Philadelphia Service Center, P.O. Box         property interest. However, withholding       the parties.
21086, FIRPTA Unit, Philadelphia, PA          is required on the sale, exchange, or
19114-0586. If you are filing after 2006,     exercise of an option.                          6. Functioning exclusively in his or her
you must send a copy of the notice of                                                       capacity as a representative of a
                                                 8. Property acquired by a                  condominium association or cooperative
nonrecognition to the Ogden Service           governmental unit. The property is
Center, P.O. Box 409101, Ogden, UT                                                          housing corporation. This exemption
                                              acquired by the United States, a U.S.         includes the board of directors, the
84409. See Regulations section                state or possession or political
1.1445-2(d)(2) for more information on                                                      committee, or other governing body.
                                              subdivision, or the District of Columbia.
the transferor’s notice of nonrecognition.
Form 8288 (Rev. 11-2006)                                                                                                        Page    5

Entities Subject to Section                   withhold 35% of the amount distributed        Section 1445(e)(5) Transactions
                                              to a foreign person from the account
1445(e)                                       during the tax year of the trust or estate
                                                                                            The transferee of a partnership interest
                                                                                            must withhold 10% of the amount
Withholding is required on certain            in which the disposition occurred. The
                                                                                            realized on the disposition by a foreign
distributions and other transactions by       withholding must be paid over to the IRS
                                                                                            partner of an interest in a domestic or
domestic or foreign corporations,             within 20 days of the date of distribution.
                                                                                            foreign partnership in which at least
qualified investment entities, trusts, and    Special rules apply to grantor trusts. See
                                                                                            50% of the value of the gross assets
estates. A domestic trust or estate must      Regulations section 1.1445-5 for more
                                                                                            consists of U.S. real property interests
withhold 35% of the amount distributed        information and how to compute the
                                                                                            and at least 90% of the value of the
to a foreign beneficiary from a “U.S. real    amount subject to withholding.
                                                                                            gross assets consists of U.S. real
property interest account” that it is            Large trust election. Trusts with          property interests plus any cash or cash
required to establish under Regulations       more than 100 beneficiaries may make          equivalents. However, no withholding is
section 1.1445-5(c)(1)(iii). A foreign        an election to withhold upon distribution     required under section 1445(e)(5) for
corporation that has not made the             rather than at the time of transfer. The      dispositions of interests in other
election under section 897(i) must            amount to be withheld from each               partnerships, trusts, or estates until the
withhold 35% of the gain it recognizes        distribution is 35% of the amount             effective date of a Treasury Decision
on the distribution of a U.S. real property   attributable to the foreign beneficiary’s     under section 897(g). No withholding is
interest to its shareholders. Certain         proportionate share of the current            required if, no earlier than 30 days
domestic corporations are required to         balance of the trust’s section 1445(e)(1)     before the transfer, the transferee
withhold tax on distributions to foreign      account. This election does not apply to      receives a statement signed by a general
shareholders.                                 any qualified investment entity or to any     partner under penalties of perjury that at
   No withholding is required on the          publicly traded trust. Special rules apply    least 50% of the value of the gross
transfer of an interest in a domestic         to large trusts that make recurring sales     assets of the partnership does not
corporation if any class of stock of the      of growing crops and timber.                  consist of U.S. real property interests or
corporation is regularly traded on an            A trust’s section 1445(e)(1) account is    that at least 90% of the value of the
established securities market. Also, no       the total net gain realized by the trust on   gross assets does not consist of U.S.
withholding is required on the transfer of    all section 1445(e)(1) transactions after     real property interests plus cash or cash
an interest in a publicly traded              the date of the election, minus the total     equivalents. The transferee may rely on
partnership or trust.                         of all distributions made by the trust        the statement unless the transferee
   No withholding will be required with       after the date of the election from such      knows it is false or the transferee
respect to an interest holder if the entity   total net gain. See Regulations section       receives a false statement notice
or fiduciary receives a certification of      1.1445-5(c)(3) for more information.          pursuant to Regulations section
nonforeign status from the interest                                                         1.1445-4.
holder. An entity or fiduciary may also       Section 1445(e)(2) Transactions
use other means to determine that an          A foreign corporation that distributes a      Section 1445(e)(6) Transactions
interest holder is not a foreign person,      U.S. real property interest must generally    A qualified investment entity must
but if it does so and it is later             withhold 35% of the gain recognized by        withhold 35% of a distribution to a
determined that the interest holder is a      the corporation. No withholding or            nonresident alien or a foreign
foreign person, the withholding may be        reduced withholding is required if the        corporation that is treated as gain
collected from the entity or fiduciary.       corporation receives a withholding            realized from the sale or exchange of a
                                              certificate from the IRS.                     U.S. real property interest. No
Section 1445(e)(1) Transactions
                                              Section 1445(e)(3) Transactions               withholding under section 1445 is
Partnerships. A domestic partnership                                                        required on a distribution to a
that is not publicly traded must withhold     Generally, a domestic corporation that        nonresident alien or foreign corporation
tax under section 1446 on effectively         distributes any property to a foreign         if the distribution is on stock regularly
connected income allocated to its             person that holds an interest in the          traded on a securities market in the
foreign partners and must file Form           corporation must withhold 10% of the          United States and the alien or
8804, Annual Return for Partnership           fair market value of the property             corporation did not own more than 5%
Withholding Tax (Section 1446), and           distributed if:                               of that stock at any time during the
Form 8805, Foreign Partner’s                     1. The foreign person’s interest in the    1-year period ending on the date of
Information Statement of Section 1446         corporation is a U.S. real property           distribution.
Withholding Tax. A publicly traded            interest under section 897, and
partnership or nominee generally must            2. The property is distributed in          Specific Instructions
withhold tax under section 1446 on            redemption of stock under section 302,
distributions to its foreign partners and                                                             Complete only Part I or
                                              in liquidation of the corporation under                 Part II.
must file Forms 1042 and 1042-S.              sections 331 through 341, or with
Because a domestic partnership that           respect to stock under section 301 that
disposes of a U.S. real property interest     is not made out of the earnings and
is required to withhold under section         profits of the corporation.                      Example 1. B, a corporation,
1446, it is not required to withhold under                                                  purchases a U.S. real property interest
section 1445(e)(1).                              No withholding or reduced withholding
                                              is required if the corporation receives a     from F, a foreign person. On settlement
Trusts and estates. If a domestic trust       withholding certificate from the IRS.         day, the settlement agent pays off
or estate disposes of a U.S. real                                                           existing loans, withholds 10% of the
property interest, the amount of gain         Section 1445(e)(4) Transactions               amount realized on the sale, and
realized must be paid into a separate                                                       disburses the remaining amount to F. B,
“U.S. real property interest account.” For    No withholding is required under section      not the agent, must complete Part I of
these purposes, a domestic trust is one       1445(e)(4), relating to certain taxable       Form 8288 and Form 8288-A.
that does not make the “large trust           distributions by domestic or foreign
                                              partnerships, trusts, and estates, until         Example 2. C, a domestic
election” (explained later), is not a                                                       corporation, distributes property to F, a
qualified investment entity, and is not       the effective date of a Treasury Decision
                                              under section 897(e)(2)(B)(ii) and (g).       foreign shareholder whose interest in C
publicly traded. The fiduciary must
Form 8288 (Rev. 11-2006)                                                                                                           Page   6
is a U.S. real property interest. The           For a nonresident alien individual who    tax. Failure to provide this information in
distribution is in redemption of C’s stock   is not eligible for a social security        a timely manner, or providing false
(section 1445(e)(3) transaction). C must     number, this is an IRS individual            information, may subject you to
withhold 10% of the fair market value of     taxpayer identification number (ITIN). If    penalties. Routine uses of this
the property distributed to F. C must        the individual does not already have an      information include giving it to the
complete Part II of Form 8288, and Form      ITIN, he or she must apply for one by        Department of Justice for civil and
8288-A.                                      attaching the completed Form 8288 to a       criminal litigation, and to cities, states,
Lines 1. In Part I, enter the name,          completed Form W-7, Application for          and the District of Columbia for use in
address, and identifying number of the       IRS Individual Taxpayer Identification       the administration of their tax laws. We
buyer or other transferee responsible for    Number, and forwarding the package to        may also disclose this information to
withholding under section 1445(a). Do        the IRS at the address given in the Form     other countries under a tax treaty, to
not enter the name, address, and             W-7 instructions.                            federal and state agencies to enforce
identifying number of a title company,       Lines 2. Enter the location and a            federal nontax criminal laws, or to
mortgage company, etc. unless it             description of the property, including any   federal law enforcement and intelligence
happens to be the actual buyer or            substantial improvements (for example,       agencies to combat terrorism.
transferee.                                  “12-unit apartment building”). In the           You are not required to provide the
   In Part II, enter the name, address,      case of interests in a corporation that      information requested on a form that is
and identifying number of the entity or      constitute a U.S. real property interest,    subject to the Paperwork Reduction Act
fiduciary responsible for withholding        enter the class or type and amount of        unless the form displays a valid OMB
under section 1445(e). Do not enter the      the interest (for example, “10,000 shares    control number. Books or records
name, address, and identifying number        Class A Preferred Stock XYZ                  relating to a form or its instructions must
of a title company, mortgage company,        Corporation”).                               be retained as long as their contents
etc. unless it happens to be the actual      Lines 4. Copies A and B of each Form         may become material in the
entity responsible for withholding under     8288-A should be counted as one form.        administration of any Internal Revenue
section 1445(e).                                                                          law. Generally, tax returns and return
                                             Part II, line 3. If you are a qualified      information are confidential, as required
            The IRS will contact the         investment entity, domestic trust or         by section 6103.
            person or entity listed on       estate, or you make the large trust
            line 1 to resolve any problems   election, enter the date of distribution.       The time needed to complete and file
 CAUTION that may arise concerning
                                                                                          these forms will vary depending on
                                             Privacy Act and Paperwork Reduction          individual circumstances. The estimated
underwithholding and/or penalties.           Act Notice. We ask for the information       average times are:
   Name and address. If you are a            on this form to carry out the Internal
                                             Revenue laws of the United States.                             Form 8288        Form 8288-A
fiduciary, list your name and the name of
the trust or estate. Enter the home          Section 1445 generally imposes a             Recordkeeping     5 hr., 15 min.   2 hr., 52 min.
address of an individual or the office       withholding obligation on the buyer or       Learning about
address of an entity.                        other transferee (withholding agent)         the law or the
                                             when a U.S. real property interest is        form              5 hr., 8 min.          30 min.
   Identifying number. For a U.S.            acquired from a foreign person. Section
individual, this is a social security                                                     Preparing and
                                             1445 also imposes a withholding              sending the form
number (SSN). For any entity other than      obligation on certain foreign and
an individual (for example, corporation,                                                  to the IRS       6 hr., 38 min.          34 min.
                                             domestic corporations, qualified
qualified investment entity, estate, or      investment entities, and the fiduciary of       If you have comments concerning the
trust), this is an employer identification   certain trusts and estates. This form is     accuracy of these time estimates or
number (EIN). If you do not have an EIN,     used to report and transmit the amount       suggestions for making these forms
you can apply for one online at              withheld.                                    simpler, we would be happy to hear or by telephone at
                                                You are required to provide this          from you. You can write to the Internal
1-800-829-4933. Also, you can file Form
                                             information. Section 6109 requires you       Revenue Service, Tax Products
SS-4, Application for Employer
                                             to provide your taxpayer identification      Coordinating Committee,
Identification Number, by fax or mail.
                                             number. We need this information to          SE:W:CAR:MP:T:T:SP, 1111 Constitution
                                             ensure that you are complying with the       Ave. NW, IR-6406, Washington, DC
                                             Internal Revenue laws and to allow us to     20224. Do not send the forms to this
                                             figure and collect the right amount of       address. Instead, see Where To File on
                                                                                          page 2.

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