Selling Florida Land as a Foreign Owner (FIRPTA)

A low sale price alone does not remove FIRPTA withholding. The IRS exception applies when one or more individual buyers acquire U.S. real property for use as a residence and the amount realized is $300,000 or less.^[2] The buyer or a family member must have definite plans to reside at the property for the required portion of the days it is used during each of the first two 12-month periods after transfer. Days when the property is vacant do not count.^[1][2]

Do not assume a standalone vacant lot qualifies merely because the buyer hopes to build later. The cited IRS guidance states the definite-plans and occupancy test but does not give vacant land a blanket exemption or blanket exclusion.^[1][2] Have a U.S. tax professional decide whether the buyer's actual construction and occupancy plans meet the residence rule before closing. Other FIRPTA exceptions may apply to particular facts, but each requires its own support.

Form 8288-B asks the IRS for a withholding certificate that reduces or eliminates the amount otherwise withheld. The current form covers claims that the seller is exempt or receives nonrecognition treatment, that the seller's maximum tax liability is below the normal withholding, or that qualifying installment-sale rules allow a reduction.^[3] Filing the form is a request, not an automatic approval, and the certificate addresses withholding only. It does not decide every tax issue in the sale.^[2][5]

Timing matters. If a completed application is submitted before or on the transfer date and remains pending at closing, the required amount is still withheld, but the buyer does not immediately send it to the IRS. After the IRS mails the certificate or denial, the amount the IRS requires must generally be reported and paid within 20 days.^[2][5] Form 8288-B says the IRS will normally act within 90 days after receiving all information needed for a proper decision, so a late or incomplete filing can outlast the planned closing.^[3]

A nonresident individual who is not eligible for a Social Security number may need an individual taxpayer identification number, or ITIN. Form 8288-B requires U.S. taxpayer identification numbers for the parties. Its instructions say an eligible seller without an ITIN can attach the completed Form 8288-B to Form W-7 and send the package to the address in the W-7 instructions.^[3] The IRS identifies this FIRPTA route as Exception 4 on Form W-7.^[4]

An ITIN is an identification number, not permission to work and not a decision on the seller's tax. Form W-7 requires supporting identity documents, and the FIRPTA exception requires transaction documents. The W-7 instructions list a completed Form 8288, 8288-A, or 8288-B plus a sales contract, settlement statement, closing disclosure, or qualifying transaction record, depending on the filing stage.^[4] A seller applying with Form 8288-B should assemble the identity and contract records early enough for professional review.^[3]

FIRPTA withholding does not replace the seller's U.S. income tax return. The IRS says the foreign transferor must file a U.S. return and attach the stamped Copy B of Form 8288-A to receive credit for tax withheld.^[5] IRS guidance also says the disposition belongs on the return for the year the actual transfer occurred, even when a withholding-certificate decision changes the date shown on Form 8288-A.^[1] An individual commonly uses Form 1040-NR; a foreign corporation may use Form 1120-F.^[2][3]

Keep the purchase record, improvement invoices, contract, deed, final settlement statement, withholding certificate, stamped Form 8288-A, and proof of U.S. tax paid. Those records help a CPA determine basis, gain, deductions, the correct return, and whether the withholding becomes a credit or supports a refund claim. A reduced withholding certificate does not establish the final gain, and full withholding does not remove the return-filing duty.^[3][5][1][2]

A Canadian resident can face reporting in both countries. Article XIII of the Canada-U.S. tax treaty allows the United States to tax a Canadian resident's gain from selling U.S. real property.^[6] Article XXIV addresses double taxation and, subject to Canadian law and treaty limits, calls for qualifying U.S. income tax on U.S.-source profits, income, or gains to be deducted from Canadian tax payable on those amounts.^[6] That relief is not the same as treating the FIRPTA amount withheld as the seller's final U.S. tax.^[7]

The CRA says a Canadian resident may be able to claim a foreign tax credit for foreign income or profit tax paid on income reported on the Canadian return. Form T2209 is used for the federal credit, and the amount is generally limited to the lower of eligible foreign tax paid or Canadian tax otherwise payable on that country's net income.^[7] Eligibility, currency conversion, timing, and supporting documents depend on the owner's facts. Keep the U.S. return, tax account record, and withholding proof for the Canadian preparer.^[7][6]

A seller outside the United States does not automatically need to travel to Florida to acknowledge a deed. Florida Statutes section 695.03 allows an acknowledgment, oath, affidavit, authentication, legalization, or proof abroad before specified officials. These include a foreign notary public with an official seal, a qualifying civil-law notary, certain U.S. diplomatic or consular officers, a Florida-appointed commissioner of deeds for that country, and an authorized military or naval officer.^[8]

The officer's seal and certificate matter to recordability. Section 695.03 requires the certificate of acknowledgment, legalization, authentication, or proof to be under the officer's seal, and it recognizes a certificate authenticating a foreign notary's sealed signature.^[8] Ask the Florida attorney or document preparer for the exact deed and acknowledgment block before meeting the foreign notary. Local document legalization, translation, identity, courier, or recording requirements may still affect the signing plan.

This page is general information, not legal or tax advice. Ask a U.S. CPA or other qualified tax professional about foreign status, basis, gain, Form 8288-B, the correct U.S. return, and any Canadian foreign tax credit. Ask a Florida real-estate attorney when ownership, signing authority, deed language, acknowledgment abroad, a trust or company, a court order, or competing title claims are unclear. Start before signing a contract when possible, because the tax forms depend on the parties, transfer date, price terms, and seller's records.^[3][4][8]