8288+Foreign+Persons+of+US+Real+Property+InterestsU.S. Withholding Tax Return for
Dispositions by Foreign Persons of
U.S. Real Property Interests
Form 8288
OMB No. 1545-0902 (Rev. November 2006)
Department of the Treasury
Internal Revenue Service
Complete Part I or Part II. Also complete and attach Copies A and B of Form(s) 8288-A.
(Attach additional sheets if you need more space.)
To Be Completed by the Buyer or Other Transferee Required To Withhold Under Section 1445(a)
Identifying number Name of buyer or other transferee responsible for withholding (see page 6) 1
Street address, apt. or suite no., or rural route. Do not use a P.O. box.
City or town, state, and ZIP code
Description and location of property acquired 2
Amount realized on the transfer 5 4 Date of transfer 3 Number of Forms 8288-A attached
Amount withheld 7
a
Check applicable box.
Withholding is of a reduced amount b
To Be Completed by an Entity Subject to the Provisions of Section 1445(e)
Identifying number Name of entity or fiduciary responsible for withholding (see instructions) 1
Street address, apt. or suite no., or rural route. Do not use a P.O. box.
City or town, state, and ZIP code
2 Description of U.S. real property interest transferred or distributed
4 Date of transfer 3 Number of Forms 8288-A attached
6
a
Total amount withheld
Amount subject to withholding at 35%
Complete all items that apply.
Amount subject to withholding at 10% b
Amount subject to withholding at reduced rate c
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge
and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Sign
Here
Title (if applicable) Date Signature of withholding agent, partner, fiduciary, or corporate officer '
Date Preparer’s SSN or PTIN Preparer’s
signature
Check if self-
employed '
Paid
Preparer’s
Use Only
Firm’s name (or
yours if self-employed)
and address
EIN '
ZIP code '
Cat. No. 62260A For Privacy Act and Paperwork Reduction Act Notice, see the instructions. Form 8288 (Rev. 11-2006)
' '
Par t I
Par t II
6
Withholding is at 10%
5
Phone number (optional)
()
Phone number (optional)
()
Large trust election to withhold at distribution d
You are required to include
the taxpayer identification
numbers (TIN) of the transferor
and transferee on Forms 8288
and 8288-A. A stamped copy of Form
8288-A will not be provided to the
transferor if the transferor’s TIN is not
included on that form. In this case, to
get credit for the withheld amount, the
transferor must attach to its U.S. income
tax return substantial evidence of
withholding (for example, closing
documents) and a statement that
contains all the required information on
Forms 8288 and 8288-A including the
transferor’s TIN.
Page 2 Form 8288 (Rev. 11-2006)
Who Must File
General Instructions
A buyer or other transferee of a U.S. real
property interest, and a corporation,
qualified investment entity, or fiduciary
that is required to withhold tax, must file
Form 8288 to report and transmit the
amount withheld. If two or more persons
are joint transferees, each is obligated to
withhold. However, the obligation of
each will be met if one of the joint
transferees withholds and transmits the
required amount to the IRS.
Section references are to the Internal
Revenue Code unless otherwise noted.
Use Form 1042, Annual Withholding
Tax Return for U.S. Source Income of
Foreign Persons, and Form 1042-S,
Foreign Person’s U.S. Source Income
Subject to Withholding, to report and
pay over the withheld amounts.
Penalties
Under section 6651, penalties apply for
failure to file Form 8288 when due and
for failure to pay the withholding when
due. In addition, if you are required to
but do not withhold tax under section
1445, the tax, including interest, may be
collected from you. Under section 7202,
you may be subject to a penalty of up to
$10,000 for willful failure to collect and
pay over the tax. Corporate officers or
other responsible persons may be
subject to a penalty under section 6672
equal to the amount that should have
been withheld and paid over to the IRS.
Purpose of Form
A withholding obligation under section
1445 is generally imposed on the buyer
or other transferee (withholding agent)
when a U.S. real property interest is
acquired from a foreign person. The
withholding obligation also applies to
foreign and domestic corporations,
qualified investment entities, and the
fiduciary of certain trusts and estates.
This withholding serves to collect U.S.
tax that may be owed by the foreign
person. Use this form to report and
transmit the amount withheld.
When To File
A transferee must file Form 8288 and
transmit the tax withheld to the IRS by
the 20th day after the date of transfer.
You must withhold even if an
application for a withholding certificate is
or has been submitted to the IRS on the
date of transfer. However, you do not
have to file Form 8288 and transmit the
withholding until the 20th day after the
day the IRS mails you a copy of the
withholding certificate or notice of
denial. But if the principal purpose for
filing the application for a withholding
certificate was to delay paying the IRS
the amount withheld, interest and
penalties will apply to the period after
the 20th day after the date of transfer.
You are not required to
withhold if any of the
Exceptions (which begin on
page 3) apply.
Amount To Withhold
Generally, you must withhold 10% of the
amount realized on the disposition by
the transferor (see Definitions on
page 3).
Installment payments. You must
withhold the full amount at the time of
the first installment payment. If you
cannot because the payment does not
involve sufficient cash or other liquid
assets, you may obtain a withholding
certificate from the IRS. See the
instructions for Form 8288-B,
Application for Withholding Certificate
for Dispositions by Foreign Persons of
U.S. Real Property Interests, for more
information.
Joint transferors. If one or more foreign
persons and one or more U.S. persons
jointly transfer a U.S. real property
interest, you must determine the amount
subject to withholding in the following
manner.
Where To File
If you are filing in 2006, send Form 8288
with the amount withheld, and Copies A
and B of Form(s) 8288-A to Internal
Revenue Service, Philadelphia, PA
19255. If you are filing after 2006, send
Form 8288 with the amount withheld,
and copies A and B of Form(s) 8288-A
to the Ogden Service Center,
P.O. Box 409101, Ogden, UT 84409.
Forms 8288-A Must Be
Attached
Anyone who completes Form 8288 must
also complete a Form 8288-A,
Statement of Withholding on
Dispositions by Foreign Persons of U.S.
Real Property Interests, for each person
subject to withholding. Copies A and B
of Form 8288-A must be attached to
Form 8288. Copy C is for your records.
See Entities Subject to Section 1445(e)
on page 5 for information about when
withholding at 35% is required. Also see
Withholding certificate issued by the IRS
on page 4 for information about applying
for reduction or elimination of
withholding.
1. Allocate the amount realized from
the transfer among the transferors based
on their capital contribution to the
property. For this purpose, a husband
and wife are treated as having
contributed 50% each.
2. Withhold on the total amount
allocated to foreign transferors.
3. Credit the amount withheld among
the foreign transferors as they mutually
agree. The transferors must request that
the withholding be credited as agreed
upon by the 10th day after the date of
transfer. If no agreement is reached,
credit the withholding by evenly dividing
it among the foreign transferors.
After receipt of Form 8288 and
Form(s) 8288-A, the IRS will stamp Copy
B of Form 8288-A to show receipt of the
withholding and will forward the
stamped copy to the foreign person
subject to withholding at the address
shown on Form 8288-A.
You are not required to furnish a copy
of Form 8288 or 8288-A directly to the
transferor. To receive credit for the
withheld amount, the transferor generally
must attach the stamped Copy B of
Form 8288-A to a U.S. income tax return
(for example, Form 1040NR or 1120-F)
or application for early refund filed with
the IRS.
TIP
Do not use Forms 8288 and 8288-A
for the following distributions.
1. A distribution of effectively
connected income by a publicly traded
partnership is subject to the withholding
requirements of section 1446.
2. A distribution from a trust that is
regularly traded on an established
securities market is subject to section
1445, but is not reported on Forms 8288
and 8288-A.
3. A distribution by a qualified
investment entity to a nonresident alien
or a foreign corporation is treated as a
dividend and is not subject to
withholding under section 1445 as a
gain from the sale or exchange of a U.S.
real property interest if:
a. The distribution is on stock regularly
traded on a securities market in the
United States, and
b. The alien or corporation did not
own more than 5% of that stock at any
time during the 1-year period ending on
the date of the distribution.
CAUTION
Page 3 Form 8288 (Rev. 11-2006)
This exception applies whether or not
the transferor (seller) is an individual,
partnership, trust, corporation, or other
transferor. However, this exception does
not apply if the actual transferee (buyer)
is not an individual, even if the property
is acquired for an individual.
2. Transferor not a foreign person.
You receive a certification of nonforeign
status from the transferor, signed under
penalties of perjury, stating that the
transferor is not a foreign person and
containing the transferor’s name,
address, and identification number
(social security number (SSN) or
employer identification number (EIN)). If
you receive a certification, the
withholding tax cannot be collected from
you unless you knew that the
certification was false or you received a
notice from your agent or the
transferor’s agent that it was false. The
certification must be signed by the
individual, a responsible officer of a
corporation, a general partner of a
partnership, or the trustee, executor, or
fiduciary of a trust or estate.
You may also use other means to
determine that the transferor is not a
foreign person. But if you do, and it is
later determined that the transferor is a
foreign person, the withholding tax may
be collected from you.
A foreign corporation electing to be
treated as a domestic corporation under
section 897(i) must attach to the
certification a copy of the
acknowledgment of the election received
from the IRS. The acknowledgment must
state that the information required by
Regulations section 1.897-3 has been
determined to be complete. If the
acknowledgment is not attached, you
may not rely on the certification. Keep
any certification of nonforeign status you
receive in your records for 5 years after
the year of transfer.
U.S. real property interest. Any
interest, other than an interest solely as
a creditor, in:
1. Real property located in the United
States or the U.S. Virgin Islands.
2. Certain personal property
associated with the use of real property.
3. A domestic corporation, unless it is
shown that the corporation was not a
U.S. real property holding corporation
during the previous 5 years (or during
the period in which the transferor held
the interest, if shorter).
A U.S. real property interest does not
include:
1. An interest in a domestically
controlled qualified investment entity.
2. An interest in a corporation that has
disposed of all its U.S. real property
interests in transactions in which the full
amount of any gain was recognized as
provided in section 897(c)(1)(B).
3. An interest in certain publicly traded
corporations, partnerships, and trusts.
See Regulations sections 1.897-1 and
-2 for more information. Also see
Transferred property that is not a U.S.
real property interest on page 4.
Amount realized. The sum of the cash
paid or to be paid (not including interest
or original issue discount), the fair
market value of other property
transferred or to be transferred, and the
amount of any liability assumed by the
transferee or to which the U.S. real
property interest is subject immediately
before and after the transfer. Generally,
the amount realized for purposes of this
withholding is the sales or contract
price.
Date of transfer. The first date on which
consideration is paid or a liability is
assumed by the transferee. However, for
purposes of sections 1445(e)(2), (3), and
(4), and Regulations sections
1.1445-5(c)(1)(iii) and 1.1445-5(c)(3), the
date of transfer is the date of distribution
that creates the obligation to withhold.
Payment of consideration does not
include the payment before passage of
legal or equitable title of earnest money
(other than pursuant to an initial
purchase contract), a good-faith deposit,
or any similar amount primarily intended
to bind the parties to the contract and
subject to forfeiture. A payment that is
not forfeitable may also be considered
earnest money, a good-faith deposit, or
a similar sum.
Exceptions
You are not required to withhold if any
of the following applies.
1. Purchase of residence for
$300,000 or less. One or more
individuals acquire U.S. real property for
use as a residence and the amount
realized (sales price) is not more than
$300,000. A U.S. real property interest is
acquired for use as a residence if you or
a member of your family has definite
plans to reside in the property for at
least 50% of the number of days the
property is used by any person during
each of the first two 12-month periods
following the date of transfer. Do not
take into account the number of days
the property will be vacant in making
this determination. No form or other
document is required to be filed with the
IRS for this exception; however, if you
do not in fact use the property as a
residence, the withholding tax may be
collected from you.
Foreign person. A nonresident alien
individual, a foreign corporation that
does not have a valid election under
section 897(i) to be treated as a
domestic corporation, a foreign
partnership, a foreign trust, or a foreign
estate. A resident alien individual is not
a foreign person.
Withholding agent. For purposes of this
return, this means the buyer or other
transferee who acquires a U.S. real
property interest from a foreign person.
A disregarded entity may not certify
that it is the transferor for U.S. tax
purposes, including sections 897 and
1445. Rather, the owner of the
disregarded entity is treated as the
transferor of the property and must
provide the certificate of nonforeign
status to avoid withholding under
section 1445.
Transferor. For purposes of this
withholding, this means any foreign
person that disposes of a U.S. real
property interest by sale, exchange, gift,
or any other disposition. A disregarded
entity cannot be the transferor for
purposes of section 1445. Instead, the
person considered as owning the assets
of the disregarded entity for federal tax
purposes is regarded as the transferor.
A disregarded entity for these purposes
means an entity that is disregarded as
an entity separate from its owner under
Regulations section 301.7701-3, a
qualified real estate investment trust
subsidiary as defined in section 856(i), or
a qualified subchapter S subsidiary
under section 1361(b)(3)(B).
Definitions
Transferee. Any person, foreign or
domestic, that acquires a U.S. real
property interest by purchase, exchange,
gift, or any other transfer.
Qualified investment entity. A qualified
investment entity is:
c A real estate investment trust (REIT),
and
c A regulated investment company (RIC)
that is a U.S. real property holding
corporation.
For more information, see Pub. 515.
Domestically controlled qualified
investment entity. A qualified
investment entity is domestically
controlled if at all times during the
testing period less than 50% in value of
its stock was held, directly or indirectly,
by foreign persons. The testing period is
the shorter of (a) the 5-year period
ending on the date of the disposition (or
distribution), or (b) the period during
which the entity was in existence.
Late notice of false certification. If,
after the date of transfer, you receive a
notice from your agent or the
transferor’s agent that the certification of
nonforeign status is false, you do not
have to withhold on consideration paid
before you received the notice. However,
you must withhold the full 10% of the
amount realized from any consideration
that remains to be paid, if possible. You
must do this by withholding and paying
over the entire amount of each
successive payment of consideration
until the full 10% has been withheld and
Page 4 Form 8288 (Rev. 11-2006)
5. Withholding certificate issued by
the IRS. A withholding certificate may
be issued by the IRS to reduce or
eliminate withholding on dispositions of
U.S. real property interests by foreign
persons. Either a transferee or transferor
may apply for the certificate. The
certificate may be issued if:
6. No consideration paid. The
amount realized by the transferor is zero
(for example, the property is transferred
as a gift and the recipient does not
assume any liabilities or furnish any
other consideration to the transferor).
8. Property acquired by a
governmental unit. The property is
acquired by the United States, a U.S.
state or possession or political
subdivision, or the District of Columbia.
7. Options to acquire U.S. real
property interests. An amount is
realized by the grantor on the grant or
lapse of an option to acquire a U.S. real
property interest. However, withholding
is required on the sale, exchange, or
exercise of an option.
An application for a withholding
certificate must comply with the
provisions of Regulations sections
1.1445-3 and 1.1445-6 and Rev. Proc.
2000-35, 2000-35 I.R.B. 211. You can
find Rev. Proc. 2000-35 on page 211 of
Internal Revenue Bulletin 2000-35 at
www.irs.gov/pub/irs-irbs/irb00-35.pdf.
In certain cases, you may use
Form 8288-B to apply for a withholding
certificate. The IRS will normally act on
an application by the 90th day after a
complete application is received.
For rules that apply to foreclosures,
see Regulations section 1.1445-2(d)(3).
If you receive a withholding certificate
from the IRS that excuses withholding,
you are not required to file Form 8288.
However, if you receive a withholding
certificate that reduces (rather than
eliminates) withholding, there is no
exception to withholding, and you are
required to file Form 8288. Attach a
copy of the withholding certificate to
Form 8288. See When To File on page 2
for more information.
a. Reduced withholding is appropriate
because the 10% or 35% amount
exceeds the transferor’s maximum tax
liability,
b. The transferor is exempt from U.S.
tax or nonrecognition provisions apply,
or
c. The transferee or transferor enters
into an agreement with the IRS for the
payment of the tax.
Liability of Agents
If the transferee or other withholding
agent has received (a) a transferor’s
certification of nonforeign status or (b) a
corporation’s statement that an interest
is not a U.S. real property interest, and
the transferee’s or transferor’s agent
knows that the document is false, the
agent must provide notice to the
transferee or other withholding agent. If
the notice is not provided, the agent will
be liable for the tax that should have
been withheld, but only to the extent of
the agent’s compensation from the
transaction.
The terms “transferor’s agent” and
“transferee’s agent” mean any person
who represents the transferor or
transferee in any negotiation with
another person (or another person’s
agent) relating to the transaction or in
settling the transaction. For purposes of
section 1445(e), a transferor’s or
transferee’s agent is any person who
represents or advises an entity, a holder
of an interest in an entity, or a fiduciary
with respect to the planning,
arrangement, or completion of a
transaction described in sections
1445(e)(1) through (4).
A person is not treated as an agent if
the person only performs one or more of
the following acts in connection with the
transaction:
1. Receiving and disbursing any part
of the consideration.
2. Recording any document.
3. Typing, copying, and other clerical
tasks.
4. Obtaining title insurance reports
and reports concerning the condition of
the property.
5. Transmitting documents between
the parties.
6. Functioning exclusively in his or her
capacity as a representative of a
condominium association or cooperative
housing corporation. This exemption
includes the board of directors, the
committee, or other governing body.
No particular form is required for this
notice. By the 20th day after the date of
transfer, you must send a copy of the
notice of nonrecognition (with a cover
letter giving your name, address, and
identification number) to the Director,
Philadelphia Service Center, P.O. Box
21086, FIRPTA Unit, Philadelphia, PA
19114-0586. If you are filing after 2006,
you must send a copy of the notice of
nonrecognition to the Ogden Service
Center, P.O. Box 409101, Ogden, UT
84409. See Regulations section
1.1445-2(d)(2) for more information on
the transferor’s notice of nonrecognition.
Note. A notice of nonrecognition cannot
be used for the exclusion from income
under section 121, like-kind exchanges
that do not qualify for nonrecognition
treatment in their entirety, and deferred
like-kind exchanges that have not been
completed when it is time to file Form
8288. In these cases, a withholding
certificate issued by the IRS, as
described next, must be obtained.
Generally, no withholding is required
on the acquisition of an interest in a
foreign corporation. However,
withholding may be required if the
foreign corporation has made the
election under section 897(i) to be
treated as a domestic corporation.
4. Transferor’s nonrecognition of
gain or loss. You may receive a notice
from the transferor signed under
penalties of perjury stating that the
transferor is not required to recognize
gain or loss on the transfer because of a
nonrecognition provision of the Internal
Revenue Code (see Temporary
Regulations section 1.897-6T(a)(2)) or a
provision in a U.S. tax treaty. You may
rely on the transferor’s notice unless
(a) only part of the gain qualifies for
nonrecognition or (b) you know or have
reason to know that the transferor is not
entitled to the claimed nonrecognition
treatment.
Late notice of false statement. If,
after the date of transfer, you receive a
notice that an interest in a corporation is
not a U.S. real property interest is false,
see Late notice of false certification on
page 3.
If you are the transferee or withholding
agent and you receive a notice of false
certification or statement from your
agent or the transferor’s agent, you must
withhold tax as if you had not received a
certification or statement. But see Late
notice of false certification on page 3.
paid to the IRS. These amounts must be
reported and transmitted to the IRS by
the 20th day following the date of each
payment.
3. Transferred property that is not a
U.S. real property interest. You acquire
an interest in property that is not a U.S.
real property interest (defined on page
3). A U.S. real property interest includes
certain interests in U.S. corporations, as
well as direct interests in real property
and certain associated personal
property.
No withholding is required on the
acquisition of an interest in a domestic
corporation if (a) any class of stock of
the corporation is regularly traded on an
established securities market, or
(b) the transferee receives a statement
by the corporation that the interest is not
a U.S. real property interest, unless you
know that the statement is false or you
receive a notice from your agent or the
transferor’s agent that the statement is
false. A corporation’s statement may be
relied on only if it is dated not more than
30 days before the date of transfer.
9. Applicable wash sale transaction.
A distribution from a domestically
controlled qualified investment entity is
treated as a distribution of a U.S. real
property interest only because an
interest in the entity was disposed of in
an applicable wash sale transaction. See
section 897(h)(5).
Page 5 Form 8288 (Rev. 11-2006)
Section 1445(e)(3) Transactions
1. The foreign person’s interest in the
corporation is a U.S. real property
interest under section 897, and
2. The property is distributed in
redemption of stock under section 302,
in liquidation of the corporation under
sections 331 through 341, or with
respect to stock under section 301 that
is not made out of the earnings and
profits of the corporation.
No withholding or reduced withholding
is required if the corporation receives a
withholding certificate from the IRS.
Section 1445(e)(4) Transactions
Section 1445(e)(5) Transactions
Large trust election. Trusts with
more than 100 beneficiaries may make
an election to withhold upon distribution
rather than at the time of transfer. The
amount to be withheld from each
distribution is 35% of the amount
attributable to the foreign beneficiary’s
proportionate share of the current
balance of the trust’s section 1445(e)(1)
account. This election does not apply to
any qualified investment entity or to any
publicly traded trust. Special rules apply
to large trusts that make recurring sales
of growing crops and timber.
Specific Instructions
Section 1445(e)(2) Transactions
A foreign corporation that distributes a
U.S. real property interest must generally
withhold 35% of the gain recognized by
the corporation. No withholding or
reduced withholding is required if the
corporation receives a withholding
certificate from the IRS.
Generally, a domestic corporation that
distributes any property to a foreign
person that holds an interest in the
corporation must withhold 10% of the
fair market value of the property
distributed if:
No withholding is required under section
1445(e)(4), relating to certain taxable
distributions by domestic or foreign
partnerships, trusts, and estates, until
the effective date of a Treasury Decision
under section 897(e)(2)(B)(ii) and (g).
The transferee of a partnership interest
must withhold 10% of the amount
realized on the disposition by a foreign
partner of an interest in a domestic or
foreign partnership in which at least
50% of the value of the gross assets
consists of U.S. real property interests
and at least 90% of the value of the
gross assets consists of U.S. real
property interests plus any cash or cash
equivalents. However, no withholding is
required under section 1445(e)(5) for
dispositions of interests in other
partnerships, trusts, or estates until the
effective date of a Treasury Decision
under section 897(g). No withholding is
required if, no earlier than 30 days
before the transfer, the transferee
receives a statement signed by a general
partner under penalties of perjury that at
least 50% of the value of the gross
assets of the partnership does not
consist of U.S. real property interests or
that at least 90% of the value of the
gross assets does not consist of U.S.
real property interests plus cash or cash
equivalents. The transferee may rely on
the statement unless the transferee
knows it is false or the transferee
receives a false statement notice
pursuant to Regulations section
1.1445-4.
Complete only Part I or
Part II.
Example 1. B, a corporation,
purchases a U.S. real property interest
from F, a foreign person. On settlement
day, the settlement agent pays off
existing loans, withholds 10% of the
amount realized on the sale, and
disburses the remaining amount to F. B,
not the agent, must complete Part I of
Form 8288 and Form 8288-A.
Example 2. C, a domestic
corporation, distributes property to F, a
foreign shareholder whose interest in C
Trusts and estates. If a domestic trust
or estate disposes of a U.S. real
property interest, the amount of gain
realized must be paid into a separate
“U.S. real property interest account.” For
these purposes, a domestic trust is one
that does not make the “large trust
election” (explained later), is not a
qualified investment entity, and is not
publicly traded. The fiduciary must
Section 1445(e)(1) Transactions
Partnerships. A domestic partnership
that is not publicly traded must withhold
tax under section 1446 on effectively
connected income allocated to its
foreign partners and must file Form
8804, Annual Return for Partnership
Withholding Tax (Section 1446), and
Form 8805, Foreign Partner’s
Information Statement of Section 1446
Withholding Tax. A publicly traded
partnership or nominee generally must
withhold tax under section 1446 on
distributions to its foreign partners and
must file Forms 1042 and 1042-S.
Because a domestic partnership that
disposes of a U.S. real property interest
is required to withhold under section
1446, it is not required to withhold under
section 1445(e)(1).
No withholding will be required with
respect to an interest holder if the entity
or fiduciary receives a certification of
nonforeign status from the interest
holder. An entity or fiduciary may also
use other means to determine that an
interest holder is not a foreign person,
but if it does so and it is later
determined that the interest holder is a
foreign person, the withholding may be
collected from the entity or fiduciary.
A trust’s section 1445(e)(1) account is
the total net gain realized by the trust on
all section 1445(e)(1) transactions after
the date of the election, minus the total
of all distributions made by the trust
after the date of the election from such
total net gain. See Regulations section
1.1445-5(c)(3) for more information.
Entities Subject to Section
1445(e)
Withholding is required on certain
distributions and other transactions by
domestic or foreign corporations,
qualified investment entities, trusts, and
estates. A domestic trust or estate must
withhold 35% of the amount distributed
to a foreign beneficiary from a “U.S. real
property interest account” that it is
required to establish under Regulations
section 1.1445-5(c)(1)(iii). A foreign
corporation that has not made the
election under section 897(i) must
withhold 35% of the gain it recognizes
on the distribution of a U.S. real property
interest to its shareholders. Certain
domestic corporations are required to
withhold tax on distributions to foreign
shareholders.
No withholding is required on the
transfer of an interest in a domestic
corporation if any class of stock of the
corporation is regularly traded on an
established securities market. Also, no
withholding is required on the transfer of
an interest in a publicly traded
partnership or trust.
withhold 35% of the amount distributed
to a foreign person from the account
during the tax year of the trust or estate
in which the disposition occurred. The
withholding must be paid over to the IRS
within 20 days of the date of distribution.
Special rules apply to grantor trusts. See
Regulations section 1.1445-5 for more
information and how to compute the
amount subject to withholding.
CAUTION
Section 1445(e)(6) Transactions
A qualified investment entity must
withhold 35% of a distribution to a
nonresident alien or a foreign
corporation that is treated as gain
realized from the sale or exchange of a
U.S. real property interest. No
withholding under section 1445 is
required on a distribution to a
nonresident alien or foreign corporation
if the distribution is on stock regularly
traded on a securities market in the
United States and the alien or
corporation did not own more than 5%
of that stock at any time during the
1-year period ending on the date of
distribution.
Page 6 Form 8288 (Rev. 11-2006)
Privacy Act and Paperwork Reduction
Act Notice. We ask for the information
on this form to carry out the Internal
Revenue laws of the United States.
Section 1445 generally imposes a
withholding obligation on the buyer or
other transferee (withholding agent)
when a U.S. real property interest is
acquired from a foreign person. Section
1445 also imposes a withholding
obligation on certain foreign and
domestic corporations, qualified
investment entities, and the fiduciary of
certain trusts and estates. This form is
used to report and transmit the amount
withheld.
The time needed to complete and file
these forms will vary depending on
individual circumstances. The estimated
average times are:
Form 8288-A
Form 8288
Recordkeeping
Learning about
the law or the
form
Preparing and
sending the form
to the IRS
If you have comments concerning the
accuracy of these time estimates or
suggestions for making these forms
simpler, we would be happy to hear
from you. You can write to the Internal
Revenue Service, Tax Products
Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution
Ave. NW, IR-6406, Washington, DC
20224. Do not send the forms to this
address. Instead, see Where To File on
page 2.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records
relating to a form or its instructions must
be retained as long as their contents
may become material in the
administration of any Internal Revenue
law. Generally, tax returns and return
information are confidential, as required
by section 6103.
Lines 2. Enter the location and a
description of the property, including any
substantial improvements (for example,
“12-unit apartment building”). In the
case of interests in a corporation that
constitute a U.S. real property interest,
enter the class or type and amount of
the interest (for example, “10,000 shares
Class A Preferred Stock XYZ
Corporation”).
Part II, line 3. If you are a qualified
investment entity, domestic trust or
estate, or you make the large trust
election, enter the date of distribution.
Lines 4. Copies A and B of each Form
8288-A should be counted as one form.
You are required to provide this
information. Section 6109 requires you
to provide your taxpayer identification
number. We need this information to
ensure that you are complying with the
Internal Revenue laws and to allow us to
figure and collect the right amount of
For a nonresident alien individual who
is not eligible for a social security
number, this is an IRS individual
taxpayer identification number (ITIN). If
the individual does not already have an
ITIN, he or she must apply for one by
attaching the completed Form 8288 to a
completed Form W-7, Application for
IRS Individual Taxpayer Identification
Number, and forwarding the package to
the IRS at the address given in the Form
W-7 instructions.
2 hr., 52 min.
5 hr., 15 min.
5 hr., 8 min.
30 min.
6 hr., 38 min.
34 min.
Lines 1. In Part I, enter the name,
address, and identifying number of the
buyer or other transferee responsible for
withholding under section 1445(a). Do
not enter the name, address, and
identifying number of a title company,
mortgage company, etc. unless it
happens to be the actual buyer or
transferee.
Identifying number. For a U.S.
individual, this is a social security
number (SSN). For any entity other than
an individual (for example, corporation,
qualified investment entity, estate, or
trust), this is an employer identification
number (EIN). If you do not have an EIN,
you can apply for one online at
www.irs.gov/smallbiz or by telephone at
1-800-829-4933. Also, you can file Form
SS-4, Application for Employer
Identification Number, by fax or mail.
Name and address. If you are a
fiduciary, list your name and the name of
the trust or estate. Enter the home
address of an individual or the office
address of an entity.
The IRS will contact the
person or entity listed on
line 1 to resolve any problems
that may arise concerning
underwithholding and/or penalties.
In Part II, enter the name, address,
and identifying number of the entity or
fiduciary responsible for withholding
under section 1445(e). Do not enter the
name, address, and identifying number
of a title company, mortgage company,
etc. unless it happens to be the actual
entity responsible for withholding under
section 1445(e).
CAUTION
is a U.S. real property interest. The
distribution is in redemption of C’s stock
(section 1445(e)(3) transaction). C must
withhold 10% of the fair market value of
the property distributed to F. C must
complete Part II of Form 8288, and Form
8288-A.
tax. Failure to provide this information in
a timely manner, or providing false
information, may subject you to
penalties. Routine uses of this
information include giving it to the
Department of Justice for civil and
criminal litigation, and to cities, states,
and the District of Columbia for use in
the administration of their tax laws. We
may also disclose this information to
other countries under a tax treaty, to
federal and state agencies to enforce
federal nontax criminal laws, or to
federal law enforcement and intelligence
agencies to combat terrorism.