pk
Level 15
Level 15

Deductions & credits

@joyanyu  , while generally with the above suggestions --- I would suggest taking care of the problem at source:

 

IRS section 1445 requirement for FIRPTA withholding is based on "foreign person".  Here is a link to the  IRC defining  Foreign Person:  https://www.irs.gov/individuals/international-taxpayers/foreign-persons.  

IRC section 1445 applicable to disposition of US RealEstate Interests is describe  the need to withhold FIRPTA tax from the transferror ( one whom disposes )  and if not the Tranferee ( the receiver/buyer of the asset ) is liable .  Thus the title company is trying to avoid exposure . But they are wrong if , and only if , both you and your spouse  ( I am assuming here that you are selling your home and that you are each a resident-- Green Card or Resident for tax purposes , having met the substantial presnce test, filing form 1040 return for the  year in question) are both US PERSONS ( for tax purposes ).   Here is a link to  IRC 1445 -- it is long and tortuous but covers all kinds of situations -->

https://www.law.cornell.edu/cfr/text/26/1.1445-1

 

Here is another page from the IRS explaining FIRPTA and covering  the area and has FAQ:

https://www.irs.gov/individuals/international-taxpayers/firpta-withholding

 

BTW , I don't see  how you can use form 843  for seeking an early refund of the FIRPTA withholding -- @DaveF1006 's link covers the use of the form but ( unless I missed it ) does not  include the use for section  1445 early refund.

 

I would hope that you can convince the Title company or their lawyer that  (a) you are not a "foreign Person " for purposes of IRC 1445 and (b) that you  are a resident for tax purposes  and hence  the FIRPTA does not apply to you or your spouse.

 

BTW -- what is your visa status -- Green Card , H-1B or what ?  How about your Spouse ?  What is the real-property you are selling --- your own residence or income property or what ?  Is the total prpoceeds more that US$300,000 ?

 

Is there more (I can do for you ?

 

pk