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Instructions for Form 8288

Department of the Treasury

Internal Revenue Service

(Rev. February 2017)

U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real

Property Interests

Section references are to the Internal Revenue

Form 8288 to report and transmit the

Withholding at 35%, see

Entities

Code unless otherwise noted.

amount withheld. If two or more persons

Subject to Section

1445(e), later.

are joint transferees, each is obligated

Withholding at a reduced amount,

Future Developments

to withhold. However, the obligation of

see

Purchase of residence for

For the latest information about

each will be met if one of the joint

$1,000,000 or

less.

developments related to Form 8288 and

transferees withholds and transmits the

For information about applying for

its instructions, such as legislation

required amount to the IRS.

reduction or elimination of withholding

enacted after they were published, go to

see

Withholding certificate issued by the

Do not use Forms 8288 and 8288-A

for the following distributions.

IRS, later.

What's New

1. A distribution of effectively

Joint transferors. If one or more

connected income by a publicly traded

foreign persons and one or more U.S.

We made the following changes to the

partnership is subject to the withholding

persons jointly transfer a U.S. real

prior version of Form 8288.

requirements of section 1446.

property interest, you must determine

Added a line at the top of the form to

the amount subject to withholding in the

2. A distribution with respect to

indicate the Form 8288 filed is an

following manner.

gains from the disposition of a U.S. real

amended return.

property interest from a trust that is

Deleted old line 5, Part I, as the

1. Allocate the amount realized from

regularly traded on an established

amount realized will be reported on new

the transfer among the transferors

securities market is subject to section

line 5a, and/or 5b.

based on their capital contribution to the

1445, but is not reported on Forms 8288

On line 5, Part II, we rearranged the

property. For this purpose, a husband

and 8288-A.

withholding rates to better reflect the

and wife are treated as having

types of transactions reported on Form

contributed 50% each.

3. A dividend distribution by a

8288.

qualified investment entity to a

2. Withhold on the total amount

The blank line to the right of line 5d,

nonresident alien or a foreign

allocated to foreign transferors.

Part II, has been replaced with a check

corporation that is attributable to gains

3. Credit the amount withheld

box, by which the filer will indicate that

from sales or exchanges by the qualified

among the foreign transferors as they

the withholding is at a reduced rate. The

investment entity of U.S. real property

mutually agree. The transferors must

amount of such withholding is included

interests is not subject to withholding

request that the withholding be credited

in the total on line 6, Part II.

under section 1445 as a gain from the

as agreed upon by the 10th day after

sale or exchange of a U.S. real property

the date of transfer. If no agreement is

General Instructions

interest if:

reached, credit the withholding by

a. The distribution is on stock

Purpose of Form

evenly dividing it among the foreign

regularly traded on a securities market

transferors.

A withholding obligation under section

in the United States, and

1445 is generally imposed on the buyer

When To File

b. The alien or corporation did not

or other transferee (withholding agent)

A transferee must file Form 8288 and

own more than 10% (for dispositions

when a U.S. real property interest is

transmit the tax withheld to the IRS by

and distributions before December 17,

acquired from a foreign person. The

the 20th day after the date of transfer.

2015, did not own more than 5% of such

withholding obligation also applies to

stock in case of a real restate

foreign and domestic corporations,

You must withhold even if an

investment trust (REIT)) of that stock at

qualified investment entities, and the

application for a withholding certificate

any time during the 1-year period

fiduciary of certain trusts and estates.

is or has been submitted to the IRS on

ending on the date of the distribution.

This withholding serves to collect U.S.

the date of transfer. However, you do

tax that may be owed by the foreign

not have to file Form 8288 and transmit

Use Form 1042, and Form 1042-S, to

person. Use Form 8288 to report and

the withholding until the 20th day after

report and pay over the withheld

transmit the amount withheld.

the day the IRS mails you a copy of the

amounts.

withholding certificate or notice of

If an exception applies, you may

Amount To Withhold

denial. But, if the principal purpose for

be required to withhold at a

TIP

filing the application for a withholding

Generally, you must withhold 15% of the

reduced rate, or you may not be

certificate was to delay paying the IRS

amount realized on the disposition by

required to withhold. See Exceptions,

the amount withheld, interest and

the transferor (see Definitions, later).

later.

penalties will apply to the period

Note. Prior to February 17, 2016, the

beginning on the 21st day after the date

Who Must File

transferor was generally required to

of transfer and ending on the day full

A buyer or other transferee of a U.S.

withhold 10% of the amount realized on

payment is made.

real property interest, and a corporation,

the disposition.

Installment payments. You must

qualified investment entity, or fiduciary

For information about:

withhold the full amount at the time of

that is required to withhold tax, must file

the first installment payment. If you

Jan 13, 2017

Cat. No. 57528F

Instructions For Form 8288 - U.s. Withholding Tax Return For Dispositions By Foreign Persons Of U.s. Real Property Interests

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