If you're involved in a real estate transaction in the United States, you had better know about FIRPTA — the Foreign Investment in Real Property Tax Act.
Today we talk with FIRPTA expert Julie Lepore of FIRPTA Solutions, who wants Realtors, homebuyers and home sellers to be aware of the risk of not considering FIRPTA when property changes hands. FIRPTA is a tax law enacted in 1980 that imposes U.S. income tax on foreign persons selling U.S. real estate. Under FIRPTA, if you buy U.S. real estate from a foreign person, you may be required to withhold 15% of the amount realized from the sale.
Standard Florida real estate contracts contain explicit language about FIRPTA, which buyers and sellers ignore at their own risk. Sometimes, buyers fail to check the nationality of the person selling the property, which may result in the buyer holding the bag for estimated tax payments that should have been collected at closing. Closing is not the time to verify nationality, says Julie, who has long evangelized a "FIRPTA-first" approach to real estate deals.
She says she's actually heard "grown men sobbing" after finding out they are responsible for the payments after failing to verify a seller's place of birth.
And this is one episode you'll want to hear through to the end: During our ever-popular Lightning Round, Julie reveals that she does a killer imitation of a famous singer — and even provides a sample!
Host: Jim Sanville. Producer: Jerry Johnson.