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zhaiwb
Returning Member

Should I have FIRPTA withholding applied as a Resident Alien selling the property on January 12th?

I have been in the US for 365 days every year for the past three years (2023, 2024, 2025) on H-1B visa, and have been using 1040 to file my taxes. So this year I sold my property on Jan 12th, which doesn't make me meet the substantial presence test rule #1 that having to be in the US for at least 31 days in current year since it's Jan 12 is 12 days only; so should I have FIRPTA applied to me or not?

 

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1 Reply
MaxA1
Employee Tax Expert

Should I have FIRPTA withholding applied as a Resident Alien selling the property on January 12th?

It depends.  If you moved out of the United States (US) on January 12 and will no longer be present in the US for the rest of 2026, then you would not meet the qualifications to be a considered a US person (for tax purposes) under the substantial presence test and will be subject to FIRPTA withholding on the sale of your property.  If you plan to be in the US for at least 31 days during the 2026 tax year, you may still be considered a US person for the year under the substantial presence test and you may be exempt from FIRPTA withholding.  You will need to provide a certified written statement to the buyer, that you are not a foreign person and are not subject to FIRPTA withholding (see #4 Exceptions to FIRPTA withholding).

 

Another thing to consider is that in most cases, it is the buyer's (transferee's) responsibility to determine if FIRPTA withholding is required, not the sellers.  The buyer is considered the withholding agent. (see FIRPTA withholding agent).

 

The following links provide more information on FIRPTA, exceptions to FIRPTA, and other definitions to terms unique to FIRPTA:

 

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