IRS Final Regulations on FIRPTA Exemption for Qualified Foreign Pension Funds

FIRPTA imposes a tax and withholding regime on gain realized on dispositions of U.S. real property interests by nonresidents or non-U.S. persons. However, “qualified foreign pension funds” are generally not subject to the tax and withholding requirements. On Dec. 29, 2022, the IRS finalized regulations which clarifies the rules for determining the qualification for the FIRPTA tax exemption under Section 897(l) for qualified foreign pension funds. In addition, the final regulations provide additional detail on the certification and documentation requirements for withholdings under Sections 1445 and 1446. Tax practitioners must have a complete understanding these final regulations to minimize any adverse tax implications for their foreign pension fund clients.

In light of the final regulations, tax counsel must be able to determine what entities qualify for the exemption, understand the information reporting requirements, withholding tax and certification rules, and other critical items.

Listen as our panel discusses key provisions of the final regulations, modifications to the FIRPTA exemption, the 85 percent test, new and revised definitions, changes and application of the withholding rules, and other key issues.

1. Overview of FIRPTA
2. Final qualified foreign pension funds regulations
3. Withholdings under Sections 1445 and 1446
4. Reporting requirements
5. Best practices for tax counsel and advisers

The panel will discuss these and other key issues:

• Significant provisions and challenges of the final IRS qualified foreign pension funds regulations, including the 85 percent test
• Application of FIRPTA to the transfer of U.S. real property by nonresidents or non-U.S. persons
• Navigating the certification and documentation requirements for withholding under Secs. 1445 and 1446
• Best practices and pitfalls to avoid for tax counsel and advisers to acquire the FIRPTA tax exemptions

Learning Objectives

After completing this course, you will be able to:

• Recognize significant tax provisions and challenges of the final IRS qualified foreign pension funds regulations
• Understand the application of FIRPTA to the transfer of U.S. real property by nonresidents or non-U.S. persons
• Ascertain the certification and documentation requirements for withholdings under Secs. 1445 and 1446 under the final regulations
• Understand how to determine what entities qualify for the FIRPTA tax exemption

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules for U.S. taxpayers owning or receiving payments from non-US retirement accounts; supervisory authority over other preparers/accountants. Specific knowledge and understanding of basic reporting requirements for U.S. taxpayers with foreign retirement account interests; familiarity with FBAR, FATCA and For 3520 filings.

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IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).