Foreign Investment in Real Property

Spring 2004 CSANews Issue 50  |  Posted date : May 05, 2007.Back to list

Dear Bird Talk,

In your last publication you published an article entitled "Changes in Foreign Investment in Real Property Tax Act" and stated that if a Canadian citizen is selling U.S. property over $300,000 U.S. they must get an ITIN from the IRS. Recently, a friend has decided to sell his U.S. property in Florida and was told that he needed to have an ITIN even though his property is worth under $190,000. Is this true?

I would appreciate any information you could give us.

Fred/Diane Hayes

Response:
The article in the CSANews was only partially correct ­ one must now obtain a TIN (unless they have a U.S. Social Security Number) if one wishes to sell any property in the U.S. There is no relevance to the value of the property. As of the 3rd of November, 2003, one must have the number before the sale in order for the title company, or whoever is handling the sale, to be able to report the sale to the IRS and to remit the withholding funds.

In order to obtain a TIN the rules have also tightened ­ you must now prove that you need a TIN. If you are filing a tax return, the procedure is to send the TIN application to the TIN office along with the tax return. The TIN office assigns a number to the return, and forwards the return to the tax office. On the other hand, if one needs a TIN for a future sale, one must send a certified copy of the deed to the TIN office to justify the issuance of the TIN.

The actual procedure is detailed, and should not be completed without the assistance of either the IRS personnel at a tax office, or the use of a professional.