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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15332
Experience:  15years with H & R Block. Divisional leader, Instructor
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What amount of tax is required on sale by non resident. Can

Customer Question

what amount of tax is required on sale by non resident. Can a 1031 apply towards new purchase of prop in New York
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.


A nonresident alien selling real estate in the U.S.can use a 1031 exchange to defer the capital gain and recaptured depreciation tax. As long as the property was not used personally by the seller.

The sale of U.S. real property interest by a foreign person is subject to a withholding tax of ten percent of the realized sales price.

Apply for a Withholding Certificate by completing Form 8288-B in advance of the U.S. property closing. Your tax attorney should be able to assist you with that.

In a simultaneous exchange, the transferee is not required to withhold if:
(1) the transferor provides a written notice to the transferee that the transferor is not required to recognize any gain or loss on the transfer is required due to I.R.C. §1031; and
(2) on the 20th day after the date of the exchange, the transferee provides a copy of the transferor's notice to the IRS.
The transferee can rely on the notice if the foreign person does not receive cash or mortgage boot in a simultaneous exchange.

Expert:  Robin D. replied 1 year ago.

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