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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13335
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am giving a loan to a foreign national for a residential

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I am giving a loan to a foreign national for a residential real estate property. Do I need to provide a W8 BEN or ECI

Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.
A loan would not be taxable nor a payment so the W8 would not be required. You would need to remember to report the interest you receive on the payments of the loan as income.

Customer:

we customarily have our domestic borrowers execute a W9 on behalf of the lender in order to check their tax status

Customer:

does the W8 have the same ability?

Robin D. :

Not really, the W8 is used for verifying status but for withholding purposes. You could have them complete the W8 but it really is for verifying when US sourced income is being paid to a nonresident alien.

Robin D. :

I would not use the ECI as that shows they have effectively connected income in the US. The loan is not income to them.

Customer:

In an excess of caution, which W8 form would you then have the borrower execute?

Robin D. :

W8 BEN if any at all

Customer:

OK, thank you so much for your help

Robin D. :

You are most welcome

Customer:

I am fully satisfied with your responses.

Robin D. :

You shoudl be given the choice (smiley faces) to show your level of satisfaction

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