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How does FIRPTA apply to a multi-member LLC taxed as a partnership? Two foreign owners selling property.
My business partner and I (both non-resident aliens from France) own a 50/50 multi-member LLC in Florida that holds a commercial property. We're planning to sell the property next year. I understand FIRPTA applies, but I'm confused about the mechanics.
Does the partnership withhold on itself? Does the buyer withhold on the partnership or on us individually? What forms are involved? This seems more complicated than a single-member LLC situation.
Related Questions
What exactly is FIRPTA and how does it affect me as a foreign LLC owner with U.S. real estate?
I'm a Canadian citizen who owns a single-member LLC in Wyoming. I bought a rental condo in Phoenix through the LLC last year. My accountant mentioned something called FIRPTA that could hit me with a big tax bill if I ever sell. I looked it up but the IRS page is dense and confusing. Can someone explain in plain English what FIRPTA actually is, why it exists, and what it means for a foreign person who holds U.S. property through an LLC? I just want to understand the basics before I start planning anything.
FIRPTA withholding — when is it 15%, 10%, or 0%? I'm confused by the different rates.
I'm about to sell a property in Florida that I've held through my LLC (I'm a UK citizen, non-resident). My closing attorney told me the withholding is 15% of the sale price, but I've seen people online say it can be 10% or even 0%. My sale price is around $280K. Is there a way to get a lower rate? What determines which percentage applies? Also, is the withholding based on the sale price or on my profit? Because 15% of the sale price seems insanely high when my actual gain is maybe $40K.
Are there any exceptions where FIRPTA withholding doesn't apply? I keep hearing about loopholes.
I'm a German national selling a small investment condo in Texas through my LLC. Sale price is about $250K. I've been told I'll lose 15% to FIRPTA withholding at closing, but a friend said there are exceptions. He mentioned something about a $300K threshold and publicly traded companies. Are there legitimate ways to avoid or reduce the withholding? I don't want to do anything shady, just want to know if there are legal exceptions I might qualify for. The property was never my residence — strictly investment.
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