If you are a non-U.S. person selling real property in the United States (for example, a residential or investment property in Florida), you may fall under the withholding and tax rules of FIRPTA. Here’s how it works — and what you should keep in mind.
Under FIRPTA, a foreign person who disposes of a U.S. real property interest (USRPI) is treated for U.S. tax purposes almost like a U.S. seller: the gain on the sale is subject to U.S. income tax, and to ensure collection of that tax, the buyer (or other transferee) must withhold a portion of the sale proceeds and remit it to the Internal Revenue Service (IRS).
A “foreign person” generally means someone who is not a U.S. citizen and not a U.S. resident alien, or a foreign corporation/trust/estate that has not elected to be treated as domestic.
A U.S. real property interest (USRPI) includes land, buildings, and certain interests in real property in the U.S., and sometimes interests in corporations or partnerships whose assets are primarily U.S. real property