Question
I’m a Canadian, selling a house in the US, and just read about this FIRPTA thing! I don’t want to pay this! Is there any way I can avoid this?
Answer
Like usual, the answer is the classic tax go-to of “It depends”. If the following items are met, you have an out:
- The buyer is a flesh-and-blood real living person;
- The house is sold for under $300,000USD in proceeds;
- The buyer will spend at least 50% of his/her time residing at the property;
There are some other exceptions, as well as some ways of structuring the transaction so that it avoids FIRPTA, but generally-speaking this will be the exception to FIRPTA withholdings that a seller can make use of. The other options involve some advanced planning, and need to be set up prior to a sale.
More Reading
Usual Disclaimer: This information is for general information purposes only, and deals with complicated and time-sensitive info that may not apply to your situation. Tax rules are always changing, and this information may not be current. Tax is complicated, this information is not tax advice, and don’t rely on this info to make tax decisions – Hire someone to help you.