Page 14 - CTT-CA Real Estate Foreign Buyer & Seller Guide_English

Taxes & FIRPTA
There are many types of tax issues which should be considered during a real estate transaction. Chicago Title provides the following information as a resource only and always recommends a seller and buyer consult with their legal and tax profes- sionals for advice.
Topics we will briefly overview which may be a part of, or a result of, your sale or purchase include:
• Capital gains
• Change of Ownership forms
• Transfer tax
• F.I.R.P.T.A.
• CAL Withholding
• Property taxes
• Supplemental taxes
• Mello Roos
The I.R.S. provides many resources which help explain the tax aspects of real estate transactions. A few of these include:
Publication #514: Withholding of Tax on Nonresident Aliens and Foreign Entities Publication #523: Selling Your Home
Publication# 530: Tax Information for First Time Homeowners
Publication #544: Sales and Other Dispositions of Assets
Publication #551: Basis of Assets
Federal Requirements
The Internal Revenue Service (IRS) requires escrow agents to report certain in- formation pertaining to sales of real property. Under the Tax Reform Act of 1986, reportable transactions include sales and exchanges of properties including, but not limited to, houses, townhouses and condominiums. Also reportable is stock in cooperative housing corporations and mobile homes without wheels.
The seller is required to provide their correct taxpayer identification number (social security number), as well as the closing date of the transaction and gross proceeds of the transaction to the escrow agent.
Escrow