If you are a non-Resident Alien and want to buy or sell property in the US,  you have to know :

·         When accounts are opened in the US, the Bank will be required to implement the Patriot Act section 326, which is the Customer Identification Program CIP

·         All business Transactions are prohibiting with anyone that appears on the SDN List …black list. You can find the list with all names at the US Department of Treasury: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx

·         Since November 8, 2003 the IRS requires all non-US persons to have a ITIN when they sell property. You will get a  Individual Taxpayer identification Number ITIN, if you are not eligible for a Social Security Number. Us e Form W-7 , you can get

·         If you are selling property , you also need to file form 8288 and 8288-A, US withholding Taxes Return for Foreign Person

·         All gains, profit and income resulting from a sale in the US, are deemed US, source income

·         Passive income like rent, interest etc is subject to withhold 30% of gross income

·         Buyers of US property from non-Residents are required to withhold 10% of the gross purchase price ( including cash deals)

·         The 10% withhold must be transferred to the IRS within 10 days

Exemption the  10% FIRPTA Rule:

·         Personal residence up to $300.000, with proof of use

·         Seller furnishes affidavit that he is not foreign

·         More info: http://www.irs.gov/businesses/small/international/article/0,,id=105000,00.html

Definition of Resident Alien:

·         Green card holder

·         Taxed on worldwide income

·         Physical Presence:  Person present in the US with a average of 183 days over a 3 year period.

o   Formula: Add the numbers from the last 3 years:  Number of days in present year plus 1/3 of days in last year plus 1/6 of the year before. Has to at least add to 183 days

Definition of Nonresident Alien:

·         Taxed only on US sourced Income

Anja Drewes, RE/MAX Elite 713-298-9177

Please verify all Information; this is just a brief summary