Indiana Non-Foreign Affidavit Under IRC 1445
What is this form?
The Non-Foreign Affidavit Under IRC 1445 is a legal document used by sellers of real property to declare that they are not foreign persons as defined by the Internal Revenue Code. This affidavit is essential in transactions involving real estate to ensure compliance with federal taxing regulations and may help exempt the seller from certain withholding taxes that apply to foreign sellers.
Key parts of this document
- Statement of non-foreign status by the seller.
- Identification of the property being sold, including its location and property description.
- Seller's taxpayer identification number and address details.
- Signature and date lines for each seller involved in the transaction.
- A section for notarization confirming the affidavit's validity.
Situations where this form applies
This form should be used whenever a seller wishes to confirm their non-foreign status when selling real estate in order to exempt the transaction from certain federal withholding requirements. It is typically required in any real estate sale where the buyer needs to ensure compliance with Internal Revenue Code Section 1445.
Who should use this form
This form is intended for:
- Sellers of real property who are not foreign persons.
- Real estate professionals and agents involved in property transactions.
- Buyers who require sellers to provide proof of their non-foreign status.
Instructions for completing this form
- Identify and enter the full names of the sellers.
- Specify the property location and provide a detailed description.
- List each seller's taxpayer identification number and address.
- Confirm the seller's non-foreign status by checking the appropriate section.
- All sellers must sign and date the affidavit in the designated spaces.
- Have the affidavit notarized to ensure its legal validity.
Does this form need to be notarized?
To make this form legally binding, it must be notarized. Our online notarization service, powered by Notarize, lets you verify and sign documents remotely through an encrypted video session.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Mistakes to watch out for
- Failing to provide complete property information.
- Not including all sellers' details and signatures.
- Missing the notarization requirement, which can invalidate the affidavit.
Why complete this form online
- Convenient access to legally vetted form templates.
- Editable format allows customization according to your needs.
- Easy downloading and printing for quick use.
Legal use & context
This affidavit is an important document in real estate transactions as it aids in preventing potential tax issues for buyers and sellers alike. By establishing non-foreign status, it protects sellers from withholding taxes that would otherwise apply if they were considered foreign persons, thus ensuring a smoother transaction process.
Summary of main points
- The Non-Foreign Affidavit Under IRC 1445 confirms that the seller is not a foreign person.
- It protects sellers from unnecessary tax withholding during property transactions.
- Notarization is essential for the affidavit to be legal and enforceable.
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FAQ
This document, included in the seller's opening package, requests that the seller swears under penalty of perjury that they are not a non-resident alien for purposes of United States income taxation. A Seller unable to complete this affidavit may be subject to withholding up to 15%.
A: The buyer must agree to sign an affidavit stating that the purchase price is under $300,000 and the buyer intends to occupy. The buyer may choose not to sign the form, in which case withholding must be done.
FIRPTA Certificate: Certification of Non-Foreign Status - FIRPTA is the Foreign Investment in Real Property Act and Form 8288. It was developed to ensure that foreign sellers of U.S. property be subject to U.S. tax on the sale.
A withholding certificate is an application for a reduced withholding based on the gain of a sale instead of the selling price. If 15% of the selling price is more than the tax you will owe on this sale, then a withholding certificate may be ideal for you.
The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) income tax withholding. FIRPTA authorized the United States to tax foreign persons on dispositions of U.S. real property interests.
The Foreign Investment in Real Property Transfer Act (FIRPTA) requires any buyer of a U.S. real property interest to withhold ten percent of the amount realized by a foreign seller. 26 USC § 1445(a).
You or a member of your family must have definite plans to reside at 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.
What Is a Certification of Non-Foreign Status? With a Certification of Non-Foreign Status, the seller of real estate is certifying under penalty of perjury, that the seller is not foreign. Therefore, the seller and the transaction will not have the withholding requirements.
