I got an email yesterday from a title officer in Texas (hi, Chip, and thanks!) who was interested in any wrinkles I might know about in the universe of withholding.  He will be giving some training sessions on this topic. I gave him a call this morning and chatted briefly this morning on the phone.

No, I don't know of any wrinkles or secret wisdom.  As far as I have experienced, the whole withholding tax situation for the real estate professionals is a pretty simple deal:

I had a question yesterday from a real estate broker about the Federal 10% withholding tax on sale of a residence. This is a frequent question, thus should be a topic for the FAQ.

Let's start at the top. When foreigners sell U.S. real estate, there is a 10% Federal tax withheld. The 10% is calculated based on the sales price.

When a nonresident of the United States disposes of real estate, a withholding tax is imposed: 10% of the amount paid by the buyer. Warning! This requirement applies to far more than merely a garden-variety sale! And note also that "real estate" as defined for U.S. tax purposes includes far more than just dirt and buildings.

The IRS website contains a description of exceptions to FIRPTA withholding., if you're looking for more information on how to get out of with withholding tax.

I've had a number of inquiries recently about how to avoid the 10% Federal withholding tax for lower-priced residential property. The rules are a bit confusing, so here's the simple explanation.

We're starting from the assumption that you have a nonresident seller of U.S. real estate (residents are exempt from withholding). When the sale price is $300,000 or less, the seller can avoid withholding if the buyer is going to use the property as a residence.

REQUIREMENT NUMBER 1: $300, 000 or less