South Dakota Non-Foreign Affidavit Under IRC 1445
About this form
The Non-Foreign Affidavit Under IRC 1445 is a crucial document for sellers of real estate to verify that they are not classified as foreign persons according to the Internal Revenue Code. This form is essential to avoid withholding taxes on the sale proceeds and establishes the sellerâs exemption from such requirements. Unlike other real estate documents, this affidavit is specifically focused on the sellerâs tax status and eligibility for exemptions under federal law.
Key components of this form
- Identification of the seller(s) and their taxpayer identification number(s).
- Description of the property being sold, including its address and legal description.
- Declaration by the seller(s) confirming they are not a foreign person as defined by tax law.
- Signature lines for seller(s) and a notary public.
When to use this document
This form should be used when a seller of real estate is completing a property transaction and needs to confirm their non-foreign status under the Internal Revenue Code. This situation typically arises during the closing process of the sale, where the buyer's agent or title company might require it to prevent tax withholding issues. It is vital for any seller intending to avoid unnecessary withholding on proceeds from the sale of their property.
Who this form is for
The following individuals should consider completing this form:
- Real estate sellers who are U.S. citizens or residents.
- Property owners selling real estate in the United States.
- Taxpayers who want to clarify their status and avoid tax withholding during a property sale.
How to complete this form
- Identify all sellers and provide their taxpayer identification numbers.
- Describe the property being sold, including the full address and legal description.
- Confirm that you are not a foreign person as defined by tax law.
- Sign the affidavit in the designated sections along with additional sellers, if applicable.
- Have the form notarized to ensure legal validity.
Does this form need to be notarized?
Notarization is required for this form to take effect. Our online notarization service, powered by Notarize, lets you verify and sign documents remotely through an encrypted video session, 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.
Typical mistakes to avoid
- Failing to adequately describe the property, leading to ambiguity.
- Not providing taxpayer identification numbers for all sellers.
- Omitting a signature or date from the affidavit.
- Neglecting the notarization requirement, resulting in an invalid document.
What to keep in mind
- The Non-Foreign Affidavit Under IRC 1445 is vital for sellers to avoid withholding taxes on property sales.
- Complete the form accurately with all necessary details and signatures.
- Notarization is a required step in the completion process.
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FAQ
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).
The Foreign Investment in Real Property Tax Act of 1980, also known as FIRPTA, may apply to your purchase. FIRPTA is a tax law that imposes U.S. income tax on foreign persons selling U.S. real estate.If the law applies to your purchase, then within 20 days of the sale, you are required to file Form 8288 with the IRS.
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.
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.
Foreign affidavit is an affidavit involving a matter of concern in one state but taken in another state or country before an officer of that state or country.
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.
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%.
