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When FIRTPA applies?

FIRTPA is the acronym of Foreign Investment in Real Property Tax Act. Purpose of the act is to address the concern that it would be extremely difficult, if not impossible, to collect income tax from a taxpayer who resides abroad especially if – after the sale – he or she does not own real estate property in the United States anymore.

Who is subject to FIRPTA?

The seller of real estate property in the United States is a subject to FIRPTA when he is not a US person but a foreign person for tax purposes. The buyer can rely on the affidavit provided by the seller to determine what is the seller’s status, unless the seller has reason to believe that the affidavit is false. A foreign person is a nonresident alien individual, a foreign corporation not treated as a domestic corporation, or a foreign partnership, trust, or estate. Each of those categories need to be examined separately:

Individuals:

A seller who is a US citizen or a US permanent resident/green card holder is exempt from FIRPTA withholding.

If the seller does not have US citizenship or a green card, he can still be considered a US person for tax purposes if he passes the substantial presence test, which consider whether the individual has spent sufficient time in the United States to make him subject to taxation. But how does the substantial presence test work?

The substantial presence test is met when the individual has been in the United States:

  • For at least 31 days during the current year (so that the individual cannot pass the test for the current year if applied in January); and
  • For at least 183 days in the year period that include the year being tested (the current year, if it is the one being tested) and the two years before the year being tested. The days should be pondered as follow:
    • The total amount of days of the year being tested;
    • 1/3 of the days of presence for the year before the year being tested; and
    • 1/6 of the days of presence for the year before the year being tested.

Finally, the substantial presence test has its own exceptions. For example, if the person is present in the United States under a F Visa (student visa) he or she will be considered non-US persons for tax purposes and so subject to FIRTPA.

Entities: 

US entities are not subject to FIRTPA. Once again, it will be necessary to determine who is considered to be a US entity.

  • Corporations incorporated in the United States or proving that they elected to be taxed as a domestic corporation under I.R.S. § 897(i) are US persons for tax purposes. Exception: a US corporation that is not publicly traded and has more than the 50% of its assets in real estate interests (a real estate holding entity) is considered a foreign entity.
  • Partnerships organized in the United States, which are always multi-members, are US persons for tax purposes; the withholding will not affect the sale of the real estate interest, but the taxable income of the partnership.
  • Limited Liability Companies do not exist for tax purposes: if single-member, a limited liability company is transparent and so considered as an individual for tax purposes; if multi-member, a limited liability company is a fiscal entity taxed as a partnership. However, limited liability companies can elect to be treated as corporations for tax purposes.
Trusts: 

To be considered as a US person for FIRTPA purposes, a trust needs to pass a two prong test:

  1. The “court test”: whether a court within the US can exercise primary supervision over the administration of the trust, which is determined by where the administration is located and by whether a US court would be heard in case of dispute over the administration of the trust.
  2. The “control test”: whether the trustees qualifying as US persons have the authority to control all substantial decisions of the trust, and are in no way subject to the decisions of trustees who are not US persons.

A First Introduction to FIRTPA

What is FIRPTA?

FIRTPA is the acronym of Foreign Investment in Real Property Tax Act. Purpose of the act is to address the concern that it would be extremely difficult, if not impossible, to collect income tax from a taxpayer who resides abroad especially if – after the sale – he or she does not own real estate property in the United States anymore.

Why FIRTPA creates a burden to the Buyer?

A question you may ask yourself is: why Buyer is involved in a tax matter that regards Seller? The answer is: because the solution that the IRS created to secure payment of taxes related to the capital gain on the transaction is to make the Buyer a withholding agent of Seller.

In fact, by definition Buyer has FIRTPA puts Buyer in charge of withholding and paying a portion of the purchase price to the IRS at closing, to cover the anticipated tax liability Seller will have as a consequence of the sale.

The final taxable amount is determined when the tax return is filed in the year following the transaction: at that time the IRS will directly refund Seller of any credit he or she may have (or, in the rare case in which an additional income tax is due, Seller will have to pay the difference to the IRS).

How much needs to be withheld?

Seller shall withhold the 15% of the purchase price and pay it to the IRS within twenty (20) days after the date of the closing; the amount is considered as paid when the forms to be sent to the IRS are postmarked. The closing agent will perform this operation on behalf of Buyer; typically, the withholding appears as a debit on the Seller’s side of the closing statement.

The closing agent will cooperate with Seller’s tax lawyer or accountant for the preparation and the submission of the required documents to the IRS.

If Seller has never filed taxes in the United States and so he or she does not have a Social Security Number, an ITIN number can be requested simultaneously with the payment of the withholding to the IRS. Typically, Seller will need to provide a certified and apostilled copy of the passport.

There are special circumstances in which a reduced withholding, or no withholding, is required. Those circumstances will be better explained in another article.

Who is subject to FIRPTA?

Seller of real estate property in the United States is a subject to FIRPTA when he or she is not a US person but a foreign person for tax purposes. A foreign person is a nonresident alien individual, a foreign corporation not treated as a domestic corporation, or a foreign partnership, trust, or estate. However, Buyer can rely on anaffidavit provided by Seller to determine what is Seller’s status, unless Seller has reason to believe that the affidavit is false.

Raffaele Matano

Italiano

Raffaele Matano è un noto immobiliarista romano specializzato nella realizzazione di strutture funzionali alla grande distribuzione organizzata quali grandi supermercati e centri commerciali.

In tale veste, ha aperto supermercati e centri commerciali di primo piano in tutta Italia avendo come clienti aziende di livello internazionale quali, tra le altre, Auchan, Carrefour, Coop, Continente, GROS, e Leroy Merlin.

La sua specialità è la ricerca di siti commerciali da proporre ad aziende della grande distribuzione organizzata, i quali vengono successivamente consegnati con la formula “chiavi in mano” all’azienda committente.

English

Raffaele Matano is a well-known Roman real estate developer specializing in the construction of functional structures for large-scale distribution such as large supermarkets and shopping centers.

In this capacity, he has opened leading supermarkets and shopping centers throughout Italy having as customers international companies such as, among others, Auchan, Carrefour, Coop, Continente, GROS, and Leroy Merlin.

His specialty is the search for commercial sites to be offered to large-scale distribution companies, which are subsequently delivered with the “turnkey” formula to the client company.

Barbara Meloni

Italiano

Barbara Meloni lavora nel settore dell’immobiliare commerciale sin dal 1998, anno in cui fu assunta come assistente del noto immobiliarista nel settore della grande distribuzione organizzata Raffaele Matano.

In tale veste, si è occupata dell’apertura di supermercati e centri commerciali di primo piano in tutta Italia con aziende di livello internazionale quali, tra le altre, Auchan, Carrefour, Coop, Continente, GROS, e Leroy Merlin, per un totale di più di trenta punti vendita in un periodo di venti anni.

La sua specialità è la ricerca di siti commerciali da proporre ad aziende della grande distribuzione organizzata, i quali vengono successivamente consegnati con la formula “chiavi in mano” all’azienda committente.

English

Barbara Meloni has been working in the commercial real estate sector since 1998, the year in which she was hired as assistant to the well-known real estate developer in the large-scale distribution sector Raffaele Matano.

In this capacity, she has dealt with the opening of leading supermarkets and shopping centers throughout Italy with companies of international level such as, among others, Auchan, Carrefour, Coop, Continente, GROS, and Leroy Merlin, for a total of more thirty points of sale over a period of twenty years.

Her specialty is the search for commercial sites to be offered to large-scale distribution companies, which are subsequently delivered with the “turnkey” formula to the client company.

Paola Pucci

Italiano

Paola Pucci è nata a Benidorm (Alicante), ha studiato in una British School dall’età di 6 anni e si è laureata in Giurisprudenza presso l’Università di Alicante con voto 7/10. Ha studiato la laurea in un gruppo speciale ad alte prestazioni e bilingue in inglese. Durante il periodo universitario Paola Pucci, ha soggiornato un anno all’estero presso l’Università Alma Mater di Bologna ed è riuscita a fare una seconda mobilità internazionale a Santiago del Cile presso l’Università di San Sebastian. Attualmente sta terminando un master per diventare avvocato presso l’università di Nebrija a Madrid.

Paola Pucci, ha realizzato uno stage presso Escobar abogados di Benidorm, effettuando la traduzione di documenti legali, scrivendo corrispondenza in inglese e italiano e redigendo documenti legali dove ha maturato esperienza nella redazione di documenti legali specialmente nell’area del diritto civile e penale.

In particolare Paola Pucci, parla correntemente inglese, spagnolo e italiano, ed ha una conoscenza informale del tedesco. Mostrare un lavoro di squadra responsabile, organizzato, di squadra, capacità di leadership quando deve arrivare a una soluzione.

Paola Pucci, è attualmente un membro attivo dell’associazione di beneficenza internazionale Lions, dove ha partecipato a scambi culturali con l’Australia e l’India per migrare la povertà.

English

Paola Pucci was born in Benidorm (Alicante), Studied in a British School since the age of 6 and graduated in Law at the University of  Alicante with a final grade 7/10. She studied the degree in a High performance special group and bilingual in English. During the university period Paola Pucci, stayed one year abroad in the University of Bologna Alma Mater and managed to make a second international mobility to Santiago de Chile in the university of San Sebastian. Currently finishing a master degree to become a lawyer in the university of Nebrija in Madrid.

Paola Pucci, realized an internship at Escobar abogados in Benidorm, making the translation of legal documentos, writing correspondence in English and Italian and drafting legal documentes where si gained experience in the drafting of legal documents specially in the area of civil and criminal law.

In particular Paola Pucci, is fluent in English, Spanish and Italian, and has the informal knowledge of German. Showing a responsable, organized, team work, leadership skills when she has to come to a solution.

Paola Pucci, is currently an active member of the Lions international charity association, where she participated in cultural exchanges with Australia and India to migrate poverty.

Infermiera licenziata dal Tirrenia Hospital, inizia il processo

Si è discussa davanti al Giudice del lavoro del Tribunale di Paola, la causa tra Alina Vlad e la struttura di Belvedere

PAOLA Si è discussa questa mattina davanti al Giudice della sezione lavoro del Tribunale di Paola, Antonio Dinatolo, la causa tra Alina Vlad, infermiera licenziata dalla Tirrenia Hospital s.r.l. di Belvedere e la stessa struttura ospedaliera, difesa dall’avvocato Vincenzo Maradei. I legali difensori della Vlad, gli avvocati Romolo Reboa e Roberta Verginelli, hanno depositato una nota scritta relativa ai documenti prodotti dalla struttura del tirreno cosentino. Il giudice ha fornito i tempi relativi allo scambio di memorie e rinviato il procedimento al 27 aprile quando si terrà la nuova udienza. Il giudice Dinatolo potrebbe decidere di prendersi altri 30 giorni di tempo prima di pronunciare il verdetto sul procedimento.

La tutela delle vittime del dovere e del terrorismo

Il Reboa Law Firm è specializzato nella tutela delle vittime di grandi tragedie sociali, sanitarie, e naturali, oltre che le vittime del dovere e del terrorismo, per le quali lo stato italiano riserva una tutela speciale.

La maggioranza di vittime del dovere sono agenti di polizia, Carabinieri o militari caduti nell’esercizio delle proprie funzioni, mentre tra le vittime del terrorismo il Reboa Law Firm ha ottenuto i risarcimenti per molte persone che subirono attentati negli anni di piombo in Italia a causa delle loro idee politiche.

Non tutti sanno che, sia in caso di sopravvivenza che in caso di morte, sia le vittime che i superstiti hanno diritto ad ottenere vari benefici.

Elenchiamo qui i benefici a cui le vittime del dovere e del terrorismo e i loro familiari hanno diritto in caso di morte, riservandoci di fornire informazioni più specifiche qualora fossimo direttamente contattati dai beneficiari:

  1. L’esenzione dal pagamento di ticket per ogni tipo di prestazione sanitaria(L. 30 Ottobre 1990 e D.P.R. n. 243/2006, art. 4, comma 1, lett. a), n. 2).
  2. Il diritto al collocamento obbligatorio (art. 1, co. 2, della L. 407/1998).
  3. Il diritto a ricevere due assegni vitalizi per ogni familiare superstite, compresi i figli maggiorenni, di € 258,23 mensili, soggetto a perequazione annua (L. n. 407/98, art. 2, co. 1) e un altro di € 1.033,00 mensili (art. 5, co. 3 L. 206/2004).
  4. Il diritto a ricevere una speciale elargizione pari, in caso di decesso, all’importo di € 200.000,00 (art. 5, co. 5 L. 206/2004).
  5. La corresponsione una tantum di due annualità, comprensive della tredicesima mensilità, del trattamento pensionistico al coniuge superstite, ai figli minori, ai figli maggiorenni, ai genitori, ed ai fratelli e alle sorelle, se conviventi e a carico (art. 5, co. 4 L. 206/2004).

Avv. Francesco Lodise

Italiano

L’Avv. Francesco Lodise, nostro partner con la propria struttura territoriale in 00049 Velletri, via Roma 156, è iscritto all’Ordine degli Avvocati di Velletri (Roma), esercita la professione di avvocato penalista in processi in tutta Italia e, talvolta, all’ Estero.

Conseguita la laurea in giurisprudenza presso l’Università “La Sapienza” di Roma, fatto il prescritto periodo di pratica, si abilita all’esercizio della professione in Roma.

Per un periodo dal 1987 al 1996 presta servizio, come cancelliere dirigente, presso la Pretura Circondariale di Velletri. Ha frequentato la Scuola Superiore della Pubblica Amministrazione a Caserta.

Ha lavorato come giornalista negli anni 1981 e 1982 presso il settimanale “Guerin Sportivo” di Bologna e presso il quotidiano “Corriere dello Sport” in Roma.

Contemporaneamente all’attività forense dal 1996 si è dedicato all’insegnamento negli istituti di istruzione superiori come professore di discipline giuridiche ed economiche.

È stato altresì docente di diritto e procedura penale presso la Scuola Allievi Marescialli e Brigadieri dell’Arma dei Carabinieri in Velletri.

È socio fondatore della Camera Penale di Velletri. Da sempre è impegnato nel Sociale in Italia e in Africa (Burundi) per sostenere, con due associazioni, gli studenti bisognosi e svantaggiati e per incentivare progetti di microcredito.

È coniugato ed ha due figli: uno medico e l’altro avvocato.

Ama i viaggi e la musica blues e rock anni ’70 ed ’80.

Ha una buona conoscenza, parlata e scritta, della lingua francese, ed una parziale di quella tedesca.

English

Francesco Lodise, our partner with its own territorial structure in 00049 Velletri, via Roma 156 and a member of the Velletri Bar Association (Rome), practices as a criminal lawyer in trials throughout Italy and, sometimes, abroad.

After graduating in law from the “La Sapienza” University of Rome, he completed the prescribed period of practice has then been admitted to practice law in Rome.

For the period from 1987 to 1996 he served as executive clerk at the District Court of Velletri. He attended the Higher School of Public Administration in Caserta.

He worked as a journalist in 1981 and 1982 at the weekly “Guerin Sportivo” in Bologna and at the newspaper “Corriere dello Sport” in Rome.

At the same time as his forensic activity since 1996, he has devoted himself to teaching in higher education institutions as a professor of legal and economic disciplines.

He was also a professor of criminal law and criminal procedure at the School of Marshals and Brigaders of the Carabinieri in Velletri.

He is a founding member of the Criminal Chamber of Velletri. He has always been involved in Social in Italy and in Africa (Burundi) to support, with two associations, students in need and disadvantaged and to encourage micro-credit projects.

He is married and has two children: one a doctor and the other a lawyer.

He loves travel and blues and rock music from the 70s and 80s.

He has a good knowledge, spoken and written, of the French language, and a partial knowledge of the German one.

Avv. Angelina Santoro

Italiano

L’Avv. Angelina Santoro pratica la libera professione nel foro di Latina, dove è titolare di un suo studio.

Da venti anni svolge la professione di avvocato nell’ambito civilistico, occupandosi di diritto d’impresa e societario con una particolare attenzione al diritto dell’ambiente e delle energie rinnovabili.

In tale ambito, ha svolto numerose consulenze per aziende specializzate nell’efficientamento dell’utilizzo delle risorse energetiche e per la realizzazione di impianti di produzione di energia da fonte rinnovabile, seguendo gli aspetti autorizzativi e contrattualistici.

È iscritta all’Albo degli avvocati abilitati al patrocinio avanti alle giurisdizioni superiori.

English

Attorney Angelina Santoro practices freelance in the Latina bar, where she owns her own studio.

For twenty years she has been practicing as a lawyer in the civil field, dealing with business and corporate law with particular attention to environmental law and renewable energy.

In this context, she has carried out numerous consultancy services for companies specialized in the efficiency of the use of energy resources and for the construction of energy production plants from renewable sources, following the authorization and contractual aspects.

She is registered in the Register of lawyers authorized to practice before the highest courts.

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