South Carolina Non-Foreign Affidavit Under IRC 1445
Overview of this form
The Non-Foreign Affidavit Under IRC 1445 is a specific legal document that sellers of real property use to affirm they are not foreign persons as defined by the Internal Revenue Code Section 26 USC 1445. This form is vital for ensuring compliance with tax withholding requirements during the sale of real estate, which differ for foreign sellers. It is essential for U.S. tax purposes to avoid excessive withholding on proceeds from the sale.
Form components explained
- Identification of the seller(s) and their taxpayer identification numbers.
- Detailed description of the property being sold.
- Statement affirming that the sellers are not foreign persons under the Internal Revenue Code.
- Signature and date fields for all sellers.
- Notary acknowledgment section for legal verification.
Common use cases
This affidavit should be used when a seller is transferring ownership of real property in the United States and needs to certify their non-foreign status. This is particularly necessary to avoid the required withholding of taxes on the sale proceeds mandated by the Internal Revenue Code when the seller is foreign.
Who this form is for
- Property sellers who are U.S. citizens or resident aliens.
- Individuals involved in the sale of real estate who need to confirm their non-foreign status.
- Real estate professionals facilitating transactions for clients who are not foreign persons.
How to complete this form
- Identify all sellers and provide their full names and taxpayer identification numbers.
- Include the complete address and legal description of the property being sold.
- Clearly state that the sellers are not foreign persons as per the criteria listed in the IRS code.
- Ensure all sellers sign and date the affidavit in the designated areas.
- Have the affidavit notarized to fulfill legal requirements.
Is notarization required?
This document requires notarization to meet legal standards. US Legal Forms provides secure online notarization powered by Notarize, allowing you to complete the process through a verified video call, available 24/7.
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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.
Common mistakes to avoid
- Failing to provide the full legal description of the property.
- Not including the taxpayer identification numbers for all sellers.
- Leaving signature and date fields blank.
- Forget to have the affidavit notarized.
Quick recap
- The Non-Foreign Affidavit Under IRC 1445 is crucial for sellers to confirm their non-foreign status in real estate transactions.
- Always provide accurate property details and seller identification to avoid legal complications.
- Notarization of the form is necessary for it to be considered valid.
- Failure to use this form when required can lead to tax withholding issues during the sale.
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FAQ
FIRPTA Exemptions The sales price is $300,000 or less, and. The buyer signs affidavit at or before closing stating they intend to use property for personal purposes for at least 50% of time property occupied for the each of the first two 12 month periods immediately after closing.
Persons purchasing U.S. real property interests (transferees) from foreign persons, certain purchasers' agents, and settlement officers are required to withhold 15% (10% for dispositions before February 17, 2016) of the amount realized on the disposition (special rules for foreign corporations).
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%.
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.
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.
A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U.S. person. It also includes a foreign branch of a U.S. financial institution if the foreign branch is a qualified intermediary.
The disposition of a U.S. real property interest by a foreign person (the transferor) is subject to income tax withholding (IRC section 1445). The transferee is the withholding agent.If the transferor is a foreign person and you fail to withhold, you may be held liable for the tax.
