Escrow & Title
In New York, a real property transfer is typically subject to FIRPTA (Foreign Investment in Real Property Tax Act) withholding when:
AThe property is located in a designated foreign investment zone
BThe seller is a foreign person (non-U.S. citizen or non-U.S. resident), requiring the buyer to withhold a percentage of the gross sale price and remit it to the IRS✓ Correct
CThe buyer is a foreign national
DThe property value exceeds $1,000,000
Explanation
FIRPTA requires buyers of U.S. real property from foreign sellers to withhold 15% (or 10% in certain cases) of the gross sale price and remit it to the IRS to ensure the foreign seller pays applicable capital gains taxes. New York closings involving foreign sellers require the buyer or their attorney to ensure FIRPTA compliance.
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