FIRPTA Certificate
(Certification of Non-Foreign Status) (Business Entity)

Summary

This FIRPTA certificate template certifies a seller's nonforeign status in a real property sales transaction and is provided to the buyer to avoid the withholding requirements under the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). This template includes practical guidance. The buyer should always require the seller to provide a FIRPTA certificate, or FIRPTA affidavit, if set up in affidavit format. Pursuant to FIRPTA, a buyer of U.S. property must withhold 15% of the gross sales price paid to a seller that is a nonresident alien individual, a foreign partnership, or a foreign corporation, unless there is an applicable exemption. Certain transactions may qualify for a 10% withholding rate, and others are exempt from FIRPTA withholding. The FIRPTA withholding tax is then paid to the Internal Revenue Service within 20 days from the closing, unless the transfer is subject to an exemption, or a withholding certificate is applied for before, or up until, closing. A buyer that fails to withhold when required to do so is responsible for the 15% withholding plus interest and penalties. For further discussion, see Foreign Investment in Real Property Tax Act​ Fundamentals in the Real Estate offering. For other template FIRPTA certificates that are specific to the type of transaction or type of seller, see FIRPTA Certificate (Certification of Non-Foreign Status) (Individual), FIRPTA Certificate (Stock or Asset Purchase Transaction) (Disregarded Entity, Entity Owner); FIRPTA Certificate (Stock or Asset Purchase Transaction) (Disregarded Entity, Individual Owner). For a long form FIRPTA certificate from a corporation certifying that an equity interest in the corporation does not constitute a U.S. real property interest, see FIRPTA Certificate (Long Form Statement by Corporation).