Arizona Non Foreign Affidavit For Corporation

Category:

Real Estate - Closings

State:

Arizona

Control #:

AZ-CLOSE7

Format:

Instant download

Description

The Arizona Non-Foreign Affidavit for Corporation is a legal document utilized primarily to confirm that the seller is not classified as a 'foreign person' under Section 1445 of the Internal Revenue Code. This form is essential for real estate transactions as it serves to exempt the buyer from withholding taxes that would otherwise be required if the seller were considered foreign. Key features include sections for the seller(s) to provide identification details, taxpayer identification numbers, and property descriptions, along with a space for notarization. The form must be filled out accurately with all necessary information regarding the transaction. Attorneys, partners, owners, associates, paralegals, and legal assistants can benefit significantly from this form by facilitating smoother transactions and ensuring compliance with tax regulations. It aids in verifying the seller's status and helps prevent potential financial penalties for both parties involved. Proper completion and notarization of the affidavit underscore its legal validity and importance in establishing the seller's non-foreign status.

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How to fill out Arizona Non-Foreign Affidavit Under IRC 1445?

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FAQ

FIRPTA stands for Foreign Investment In Real Property Tax Act (26 USC §1445). It is a tax law designed to ensure payment of tax to the Internal Revenue Service (IRS), as may be due, when US property is sold by any foreign person.

FIRPTA applies to foreign corporations, partnerships and other entities selling U.S. real properties. It also applies to individual sellers who are considered non-residents.

Form 8288-AThe IRS has to stamp your copy B and will then get it sent to the person who is withholding your file. That person is the one who will be filing a US income tax return and will then have to attach it to the stamped form 8288-A so that they receive any credit for the withheld tax.

Buyers (transferees), who are generally the withholding agents, must use Forms 8288 and 8288-A to report and pay to the IRS any tax withheld on the acquisition of U.S. real property interests from foreign persons.

foreign person affidavit is made by a seller of a real property stating that s/he is a nonforeign seller as defined by the Internal Revenue Code Section 26 USC 1445. The nonforeign affidavit is required to afford the buyer with guarantee that the seller is not a foreign person.

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Non-Foreign Affidavit Under IRC 1445

Description: Under Federal law, (the Foreign Investment in Real Property Tax Act (FIRPTA)(26 USC 1445) and the regulations thereunder (26 CFR Parts 1 and 602)), a buyer of real estate is required to withhold a tax from the sale of real property to a foreign person unless an exemption applies. An exemption from withholding is provided for individuals who purchase property for use as their principal residence for $300,000 or less. Principal residence is defined to mean that the buyer will reside there for more than 50% of the time in each of the next two years. If you have a duty to withhold and you fail to do so, you can be liable for an amount equal to your compensation in the transaction and in some cases for the amount of tax that should have been withheld The affidavit is needed to provide the buyer with assurance that the seller is not a foreign person.

The general rule and exemptions as stated in Sec. 1445, Withholding of tax on dispositions of United States real property interests, provides:

(a) General rule

Except as otherwise provided in this section, in the case of any disposition of a United States real property interest (as defined in section 897(c)) by a foreign person, the transferee shall be required to deduct and withhold a tax equal to 10 percent of the amount realized on the disposition.

(b) Exemptions

(1) In general

No person shall be required to deduct and withhold any amount under subsection (a) with respect to a disposition if paragraph (2), (3), (4), (5), or (6) applies to the transaction.

(2) Transferor furnishes nonforeign affidavit. Except as provided in paragraph (7), this paragraph applies to the disposition if the transferor furnishes to the transferee an affidavit by the transferor stating, under penalty of perjury, the transferor's United States taxpayer identification number and that the transferor is not a foreign person.

(3) Nonpublicly traded domestic corporation furnishes affidavit that interests in corporation not United States real property interests. Except as provided in paragraph (7), this paragraph applies in the case of a disposition of any interest in any domestic corporation if the domestic corporation furnishes to the transferee an affidavit by the domestic corporation stating, under penalty of perjury, that -

(A) the domestic corporation is not and has not been a United States real property holding corporation (as defined in section 897(c)(2)) during the applicable period specified in section 897(c)(1)(A)(ii), or

(B) as of the date of the disposition, interests in such corporation are not United States real property interests by reason of section 897(c)(1)(B).

(4) Transferee receives qualifying statement

(A) In general

This paragraph applies to the disposition if the transferee receives a qualifying statement at such time, in such manner, and subject to such terms and conditions as the Secretary may by regulations prescribe.

(B) Qualifying statement

For purposes of subparagraph (A), the term ''qualifying statement'' means a statement by the Secretary that -

(i) the transferor either -

(I) has reached agreement with the Secretary (or such agreement has been reached by the transferee) for the payment of any tax imposed by section 871(b)(1) or 882(a)(1) on any gain recognized by the transferor on the disposition of the United States real property interest, or

(II) is exempt from any tax imposed by section 871(b)(1)or 882(a)(1) on any gain recognized by the transferor on the disposition of the United States real property interest, and
(ii) the transferor or transferee has satisfied any transferor's unsatisfied withholding liability or has provided adequate security to cover such liability.

(5) Residence where amount realized does not exceed $300,000

This paragraph applies to the disposition if - (A) the property is acquired by the transferee for use by him as a residence, and (B) the amount realized for the property does not exceed $300,000.

(6) Stock regularly traded on established securities market

This paragraph applies if the disposition is of a share of a class of stock that is regularly traded on an established securities market.

(7) Special rules for paragraphs (2) and (3) Paragraph (2) or (3) (as the case may be) shall not apply to any disposition -

(A) if -

(i) the transferee has actual knowledge that the affidavit referred to in such paragraph is false, or

(ii) the transferee receives a notice (as described in subsection (d)) from a transferor's agent or a transferee's agent that such affidavit is false, or

(B) if the Secretary by regulations requires the transferee to furnish a copy of such affidavit to the Secretary and the transferee fails to furnish a copy of such affidavit to the Secretary at such time and in such manner as required by such regulations.

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Non-Foreign Affidavit Under IRC 1445

The general rule and exemptions as stated in Sec. 1445, Withholding of tax on dispositions of United States real property interests, provides:

(a) General rule

(b) Exemptions

(1) In general

No person shall be required to deduct and withhold any amount under subsection (a) with respect to a disposition if paragraph (2), (3), (4), (5), or (6) applies to the transaction.

(B) as of the date of the disposition, interests in such corporation are not United States real property interests by reason of section 897(c)(1)(B).

(4) Transferee receives qualifying statement

(A) In general

(B) Qualifying statement

For purposes of subparagraph (A), the term ''qualifying statement'' means a statement by the Secretary that -

(i) the transferor either -

(5) Residence where amount realized does not exceed $300,000

This paragraph applies to the disposition if - (A) the property is acquired by the transferee for use by him as a residence, and (B) the amount realized for the property does not exceed $300,000.

(6) Stock regularly traded on established securities market

This paragraph applies if the disposition is of a share of a class of stock that is regularly traded on an established securities market.

(7) Special rules for paragraphs (2) and (3) Paragraph (2) or (3) (as the case may be) shall not apply to any disposition -

(A) if -

(i) the transferee has actual knowledge that the affidavit referred to in such paragraph is false, or

(ii) the transferee receives a notice (as described in subsection (d)) from a transferor's agent or a transferee's agent that such affidavit is false, or

....................

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Arizona Non Foreign Affidavit For Corporation

Description

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Trusted and secure by over 3 million people of the world’s leading companies

Arizona Non Foreign Affidavit For Corporation

Description

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Viewed forms

How to fill out Arizona Non-Foreign Affidavit Under IRC 1445?

Form popularity

FAQ

What is a foreign person affidavit?

Does FIRPTA apply to corporations?

WHO Issues form 8288-A?

Who fills out form 8288?

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