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FIRPTA Withholding Tax Increases

By:  Amanda Wilson

The Foreign Investment in Real Property Tax Act (FIRPTA) subjects foreign sellers to U.S. tax when they sell their interest in real property located in the U.S., including interests in companies that predominately hold real estate.  To accomplish this, the purchasers generally are required to withhold 10% of the gross sales price when the seller is foreign.  Legislation that was passed at the end of last year (the PATH Act) increases this withholding rate from 10% to 15% effective as of February 16, 2016.  If you are purchasing a U.S. real estate interest from a foreign seller, make sure you are aware of this change and adequately withhold.  If you fail to do so, you may find yourself liable for the extra withholding. read more

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Beware Transferee Liability

By:  Amanda Wilson

One of the great features of corporations is that liability in the corporation generally does not extend to its shareholders, including tax liability.  Like any rule, though, there is almost always an exception.   In this case, the exception can be brutal. read more

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Considering converting your vacation home to a rental property, seriously?

By Joe Zitzka

Many people have vacation homes they’ve purchased over the years but don’t use often because life gets in the way. So what do you do when someone suggests converting that unused vacation home into a rental property that gives rise to deductions and might even result in a useable loss if you sell it for less than you paid for it when you bought at the height of the market?  Well, according to the Tax Court, you take the rental process seriously. read more