What is FIRPTA and how does it affect me, as a Mexican Citizen, when I sell?

­🇺🇸 What Is FIRPTA?

FIRPTA requires that when a foreign person sells U.S. real estate, 15% of the gross sale price must be withheld at closing and sent to the IRS as a prepayment of potential taxes.

🔒 It’s not a penalty or extra tax — it’s a withholding, similar to income tax withholding on a paycheck.

🇲🇽 How Does FIRPTA Affect Mexican Citizens Who Sell Property in Miami?

• If you sell your property in the U.S. and you are not a U.S. tax resident, 15% of the sales price (not the profit) will be withheld at closing.
   
• Example:
  If you sell your Miami property for $500,000, the buyer (or escrow agent) is required to withhold $75,000 and send it to the IRS.
   

🧾 Can You Recover the Withholding?

Yes. After the sale, you can file a U.S. tax return to report the actual gain (if any), and you may receive a partial or full refund.

• If you had little or no gain, most of the withheld amount can be returned.
   
• You’ll need an ITIN (Individual Taxpayer Identification Number) to file.
   

📝 Optionally, you can apply for a Withholding Certificate before the sale closes to reduce or eliminate the 15% if you prove there will be no or low tax due.

🛡️ How to Prepare Before Selling

• Plan ahead: Start your tax prep early — getting a withholding certificate takes time.
   
• Work with a real estate agent, CPA, and closing attorney experienced in FIRPTA.
   
• Consider holding the property in an LLC or trust structure to simplify future sales and tax handling (especially for estate planning).
   

⚠️ Key Takeaways

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