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In order to avoid issues with FIRPTA, the seller will sign an Affidavit and certify status. Otherwise, various pesky IRS forms, such as Form 8288 may be required.
(6) Qualified substitute The term qualified substitute means, with respect to a disposition of a United States real property interest (A) the person (including any attorney or title company) responsible for closing the transaction, other than the transferor's agent, and (B) the transferee's agent.
A qualified substitute may be (i) an attorney, title company, or escrow company (but not the Seller's agent) responsible for closing the transaction, or (ii) the Buyer's agent. 2.
BOSTON Merger and acquisition agreements almost universally require the target or seller to deliver at closing a so-called FIRPTA certificate i.e., an affidavit that either the target is not a United States real property holding corporation or that the seller is not a foreign person, in each case in accordance
FIRPTA, which was established in 1980 stands for Foreign Investment Real Property Tax Act. This is essentially a prepayment of anticipated tax due on the gain of the sale of a U.S. real property interest. A refund may be issued when taxes are filed, if an overpayment is made.