Form 8288: Withholding on a Sale of U.S. Real Estate by a Foreign Person
Published November 7, 2026
Form 8288 is the return a buyer uses to report and send in tax it withheld when it buys U.S. real estate from a foreign person. The withholding rule is often called FIRPTA, for the Foreign Investment in Real Property Tax Act. The buyer is the party that must withhold. The amount withheld is a payment on the seller's tax.
The Instructions for Form 8288 (Rev. January 2026) explain the rules. This post is general information. Every real estate sale has its own facts, so check the instructions and ask your closing agent or tax adviser about your deal.
Who must withhold
A buyer or other transferee of a U.S. real property interest must withhold when it acquires that interest from a foreign person. The buyer completes Part I of Form 8288. If two or more buyers buy together, each is obligated to withhold. One of them may withhold and send in the full amount, and that meets the obligation for all.
Certain corporations, qualified investment entities, and fiduciaries have their own withholding duty under another section. They use Part II of the form.
How much to withhold
Generally, the buyer withholds 15% of the amount realized on the disposition. In most cases, the amount realized is the amount paid for the property. If U.S. and foreign persons sell together, the amount is allocated by each seller's capital contribution. A husband and wife are treated as each contributing 50%. The buyer withholds on the part allocated to the foreign sellers.
Homes bought for use as a residence
Two reduced rules apply when the buyer will live in the property:
- If the sale amount is more than $300,000 but not more than $1 million, the rate is 10%.
- If the sale amount is $300,000 or less, no withholding is required. The buyer or a family member must have firm plans to live in the home for at least 50% of the days it is used during each of the first two 12-month periods after the transfer.
When to file and pay
The buyer must file Form 8288 and send the tax to the IRS by the 20th day after the date of transfer. The buyer must withhold even if a withholding certificate request was made on the transfer date. In that case, the filing and payment can wait until 20 days after the IRS mails the certificate or a notice of denial.
There is one catch. If the main purpose of the request was to delay payment, interest and penalties apply from the 21st day after the transfer.
Form 8288-A
File a separate Form 8288-A for each person subject to withholding. Copies A and B are attached to Form 8288. Copy C is for your records. The IRS stamps Copy B, and the foreign seller uses it to claim credit for the amount withheld on a U.S. income tax return.
Penalties
Under section 6651, penalties apply for filing late and for paying late. If the buyer was required to withhold but did not, the tax and interest may be collected from it. Under section 7202, a penalty of up to $10,000 applies for willful failure to collect and pay over the tax. Responsible officers may face a penalty under section 6672 equal to the amount that should have been withheld.
Related posts
A foreign person who earns U.S. income may face withholding of a different kind. For the 30% tax on U.S. income, see The 30% Tax on U.S. Income for Nonresident Aliens.
Checklist
- Confirm whether the seller is a foreign person.
- Find the amount realized, usually the sale amount, and any allocation between sellers.
- Check whether a residence rule applies to the sale amount.
- Count 20 days from the transfer date for the Form 8288 deadline.
- Attach Form 8288-A copies A and B, and keep copy C.
This is general information only. It is not tax advice for your situation.
Sources: Sources: IRS, Instructions for Form 8288 (Rev. January 2026) (https://www.irs.gov/pub/irs-pdf/i8288.pdf) This is general information, not advice about your specific return.
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