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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Wednesday, February 3, 2021

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This course will explain the complexities of taxation and withholding on foreign investment in U.S. real property. Our panel of multinational tax veterans will focus on strategies to minimize taxation of these properties--whether held individually or through an entity--for tax practitioners working with nonresident aliens (NRAs).

Faculty

Patrick J. McCormick
Partner
Rimon, P.C.

Mr. McCormick specializes in the areas of international taxation and multinational trusts and estates. He has published assorted national articles and given innumerous national and local presentations on assorted areas of international tax. He is licensed to practice in the State of New Jersey and the Commonwealth of Pennsylvania.

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Mark Perlberg
Founder
Mark Perlberg, CPA, PLLC

Mr. Perlberg has a passion for entrepreneurship and helping people navigate the complex world of accounting and taxes to reach their goals. He worked as a real estate agent in New York City before studying accounting in order to provide clients a greater understanding of financial decisions that impact them and their businesses.

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Description

There are many reasons nonresidents purchase real estate in the U.S. NRAs may purchase property in the U.S. as an investment, a business holding, or a second or vacation home. Unless income is effectively connected to a U.S. trade or business, it is generally not subject to U.S. taxation. Enter Section 897 of the IRC, which statutorily classifies gain from the disposition of U.S. real estate as effectively connected income (ECI) and subject to U.S. tax. Additionally, Section 1445(a) requires that transferees of a USRPI must withhold and remit a 15 percent tax on these sales.

Adding another layer of complexity is determining the tax consequences of holding USRPI before its sale. ECI and FDAP (fixed and determinable annual or periodic income) rules determine taxation of current year income. FDAP income is generally taxed at a flat rate of 30 percent, with no deductions permitted. ECI is taxed after deductions; however, an election is often required for the income to be treated as ECI. Tax professionals working with NRAs that own real estate in America must understand the nuances of these complex regulations.

Listen as our panel of international tax experts explains the differences between ECI and FDAP, holding structure considerations for nonresidents owning U.S. real property, and withholding requirements (and avoiding withholding) on sales of U.S. property by NRAs.

Outline

  1. FIRPTA, an introduction
  2. Effectively connected income
  3. Fixed and deteriminable periodic or annual income
  4. Withholding
    1. Current income
    2. Sales proceeds
  5. Ownership structures

Benefits

The panel will review these and other key issues:

  • Which taxpayers are subject to mandatory withholding on sales of U.S. real estate?
  • What criteria must be met for income from U.S. real estate to be categorized as ECI?
  • Who is obligated to withhold and remit withholding taxes under Section 1445(a) on property transfers?
  • Under what circumstances should an NRA consider holding a U.S. real estate interest in an LLC?

NASBA Details

 

Learning Objectives

After completing this course, you will be able to:

  • Determine which taxpayers are subject to mandatory withholding on the sales of U.S. real estate.

  • Identify the best ways to structure nonresident U.S. real estate investments.

  • Distinguish between ECI and FDAP.

  • Recognize the various tax treatments a foreign investor in U.S. real estate receives based upon entity choice.

  • Ascertain who is obligated to without and remit withholding taxes on property transfers.

  • Establish the criteria that must be met for income from U.S. real estate to be categorized as ECI.

     

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite:

    Three years+ business or tax firm experience at mid-level within the organization. Specific knowledge and understanding of foreign investment in U.S. real estate, the Foreign Investment in Real Property Tax Act (FIRPTA, effectively connected income (ECI), fixed and determinable annual or periodic income (FDAP), withholding on sales of U.S. real estate, and whom is obligated to withhold and remit taxes on property transfers; familiarity with structuring ownership for nonresident s of U.S. property holdings and elections for income to be treated as ECI.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).