Contact UsI am a nonresident of the United States and own an apartment (coop, cooperative, condo, condominium, house, land, office-commercial space, etc.) in the United States via an LLC which I wholly own. Do I have to file a tax return in the United States to report the sale?
Do I have to file a tax return in the United States to report the sale? Do I have to file anything for the LLC? Will FIRPTA withholding apply?
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Tax Professional Answers
Alicea Castellanos, CPA, TEP, N.P.
Whether you have a gain or loss on the sale of your US situated property, you will have to file a U.S. income tax return and report your sale transaction. You and or your LLC may have a filing requirement, depending on your facts, these include but are not all situations:
The LLC had no bank account and you paid annual expenses on behalf of the LLC (Form 5472 would be required and if not filed, the penalty exposure is $25,000 per Form 5472)
You used the property for personal use without paying rent to the LLC (Form 5472 would be required for the LLC); and
You rented the property and collected rents (you would be required to file income tax returns to report the rental activity).
FIRPTA will apply but depending on your ultimate tax, if any, this may be eliminated or reduced. Also, this withholding is a prepayment toward the ultimate tax liability and is not an additional tax.
Global Taxes can help you determine the best course of action for your particular situation. Contact Alicea Castellanos at Alicea@globaltaxes.com
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37 weeks ago
The LLC had no bank account and you paid annual expenses on behalf of the LLC (Form 5472 would be required and if not filed, the penalty exposure is $25,000 per Form 5472)
You used the property for personal use without paying rent to the LLC (Form 5472 would be required for the LLC); and
You rented the property and collected rents (you would be required to file income tax returns to report the rental activity).
FIRPTA will apply but depending on your ultimate tax, if any, this may be eliminated or reduced. Also, this withholding is a prepayment toward the ultimate tax liability and is not an additional tax.
Global Taxes can help you determine the best course of action for your particular situation. Contact Alicea Castellanos at Alicea@globaltaxes.com