[WSBARP] FIRPTA Tax

[John J. Sullivan]

Sam: 

Are they filing a joint U.S. return? Been a long time since I worked on FIRPTA issues (my career started reading the daily advance sheets on the Tax Reform Act of 1986 around the time FIRPTA was enacted). 

IMH first impression escrow should accept a certification from wife. Under WA law conveyance is by execution and delivery of the deed. Recording is not required as between them. 

Can she apply for a withholding exemption on the basis that she files a return on her worldwide income, which will report any gain?

https://www.irs.gov/individuals/international-taxpayers/exceptions-from-firpta-withholding

https://www.irs.gov/individuals/international-taxpayers/format-for-applications

John J. Sullivan

Sent from my iPad

> On Nov 12, 2021, at 10:43 AM, Samuel M. Meyler <samuel at meylerlegal.com> wrote:
> 
> 
> Listmates,
>  
> Happy Friday!  I’m looking for some input on the following situation…
>  
> A Swiss citizen with a green card living in Washington in 2010 and his American wife buy a primary residence together.  They decide to move to Switzerland in 2014.  They execute a quit claim deed in 2014 from husband and wife, to wife, to create separate property, but they fail to record it (should have hired an attorney!).  They did get the assessor to put the property tax bill into wife’s name in 2014.  The QCD is properly acknowledged and there is no question that the QCD was signed and notarized in 2014.  Swiss husband allows his green card to lapse in 2015.  Wife is still a U.S. citizen and paid taxes on the rental income since that time.
>  
> In 2021 they decide to list the property and learn that they never properly recorded the QCD.  Listing goes pending.  They get the recorder’s office to record the QCD.  Notwithstanding the fact that the QCD was executed and acknowledged in 2014 and is now recorded, escrow is requiring a FIRPTA holdback.
>  
> Shouldn’t escrow acknowledge that husband actually conveyed the property to wife in 2014 despite the fact that the deed was not recorded?  Any thoughts on how to address this?  Are there any exemptions that apply?  All input is appreciated.
>  
> Sam
>  
>  
>  
> Samuel M. Meyler
> Meyler Legal, PLLC 
> 1700 Westlake Ave. N., Ste. 200
> Seattle, Washington 98109
> Tel:  206.876.7770
> Fax:  206.876.7771
> Email:  samuel at meylerlegal.com
>   
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