When real property is sold by a foreign person in the United States, buyers, attorneys, real estate agents, and title companies need to be aware of a potential trap contained in the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). Under FIRTPA, the buyer is required to withhold 15% of the gross sales price, or the “amount realized,” to ensure any taxable gain realized by the seller is actually paid to the IRS.
Property classification may seem confusing, but in legal terms, all property is classified as either real property or personal property. Because each is treated differently under state and federal law, it is important to know the type(s) of property you are dealing with when drafting a contract or determining property rights, so that you can seek optimum legal protection.
When buying a home or a piece of property, most people do not expect the big stack of documents delivered to them at closing. These documents often include the Homeowners’ Association documents, plats or maps, and a large document entitled the “Declaration of Covenants, Conditions, and Reservations” (“CCRs”).