Under the TREC One to Four Family Residential Contract, Paragraph 20 addresses the federal tax requirements for foreign sellers. If the seller is a foreign person under FIRPTA (Foreign Investment in Real Property Tax Act), what must occur at closing?
Correct Answer
B) The buyer must withhold a percentage of the sales price for potential federal income taxes
Under FIRPTA, when a seller is a foreign person, the buyer is required to withhold a percentage of the sales price (typically 15% for properties over $1 million) and remit it to the IRS. This is addressed in Paragraph 20 of the TREC contract.
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Previous Question
In the TREC One to Four Family Residential Contract, Paragraph 22 addresses the agreement of the parties. It states that the contract constitutes the entire agreement. A buyer claims the seller verbally promised to include a riding lawnmower in the sale, but it is not listed in the contract. Under the contract:
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Under the TREC One to Four Family Residential Contract, Paragraph 7E addresses lender-required repairs. If the buyer's lender requires certain repairs before funding the loan, who is responsible for making those repairs?