Tax withholding while selling primary residence on H1B

[suryakirantnv]

Hi, 

I am on H1B and in USA for the past 14 years with approved I-140. I am in NJ for the past 13+ years and I bought a primary residence (condo) in 2017-March and have a 30-year mortgage on the same. Now I am planning to sell the residence. I am reading different articles that for a non-resident alien, 15% of the sale price needs to be withhold with IRS as part of closing.  I took the mortgage with 5% down. In case my sale price is not atleast 10% more than the bought price, am I suppose to borrow this money and pay IRS? I know I can claim this money back as part of my tax returns but since we are at the start of the year, I still need to borrow this money for a full year. Any other alternatives are possible here?

I am reading in some places that for the tax purposes, I am resident alien as I am staying in USA for more than 6 months or so. Please advice. 

Regards,

Surya Kiran.

[MarilynG1 · Accepted solution]

The FIRPTA Withholding Rule requires that the Buyer remit 10% of the 'amount realized' to the IRS within 20 days of the sale, if the home purchase is made from a foreign buyer.

However, since you are a Resident Alien, this would not apply to you.

The withholding is excepted in various circumstances; one being if the Buyer is purchasing the home as their main residence and the sale price is under 300K. 

Click the link for detailed information from the IRS on Exceptions from FIRPTA Withholding. 

[abhishekmanekar]

I'm in a similar situation(selling) and my agent(and the title company) is asking for a letter from someone other than me that can substantiate that I am a resident alien. Who should I get such a letter from? Any advice?

[venkz]

what did you end up doing? Similar situation with me now.

[pk]

@venkz , do you still need help on this ?   Can you tell me a little bit more about  your exact situation ( how many years in the USA;  is your H-1B expired , when do you plan to leave USA, which state is your property in, your citizenship ( India? );  etc. etc. --NO Personally Identifiable Info  please .

Namaste

pk