Extract to table

Section 897 — Taxation of Dispositions of USRPIs by Foreign Persons Section 897(a) of the Code provides the foundational rule that gain or loss of a nonresident alien individual or a foreign corporation from the disposition of a United States real property interest shall be taken into account as if such gain or loss were effectively connected with the conduct of a trade or business within the United States

Section 1445(a) provides the general rule: "Except as otherwise provided in this section, in the case of any disposition of a United States real property interest (as defined in section 897(c)) by a foreign person, the transferee shall be required to deduct and withhold a tax equal to 15 percent of the amount realized on the disposition

Where the transferor is a partnership, the certification must be signed by a general partner

Where the transferor is a limited liability company classified as a partnership for tax purposes, the certification must be signed by a manager or authorized member

The transferee must retain the non-foreign person certification for a period of five years following the date of the transfer and must make it available for inspection upon request by the Internal Revenue Service

Specifically, Section 1446(a) provides that, if a partnership has ECTI for any taxable year and any portion of such income is allocable to a foreign partner, the partnership shall pay a withholding tax on behalf of such foreign partner