1031 Property Exchanges
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Certified / FEA

Strategic Property
Exchanges, LLC
11353 Reed Hartman Hwy.
Suite 300
Cincinnati, OH 45241

Toll Free: (800) 427-7212
Phone: (513) 412-3481
Fax: (513) 412-3482

We are a qualified 1031 exchange company


 
Foreign National Property Exchange

Exchanges of US property owned by Nonresidents

The exchange of US real estate owned by Foreign Nationals for other US real estate is allowable under Section 1031. However, sales of US real estate taking place since January 1, 1985, are subject to withholding tax of 10% of the sales price realized by the transferor.

Real property is defined to include: leasehold interests; options to buy or lease real property; Partial interests, including mineral royalties, life estates, remainders, reversions, and “rights of refusal in real property; unsevered natural products of land include growing crops, timber, and mineral deposits; movable walls and furnishings; mining equipment; farm machinery and other equipment used to “cultivate the soil and harvest its products”; equipment used predominantly to construct real property improvements; beds and other furniture owned by the owner or operator of a lodging facility and used predominantly in operating the facility; and office furniture and equipment provided by a lesser for the use of lessees of furnished office space.

Foreign nationals include a nonresident alien individual, a foreign corporation, foreign partnership, foreign trust, or foreign estate

The buyer of US real estate from a foreign seller must withhold the 10% withholding tax and remit it to the IRS. Failure to withhold results in personal liable for the amount required to be withheld.

There are complex rules regarding ownership of real estate through business entities to be considered as well.

The Foreign National may apply for a withholding certificate from the IRS on or before the date of the initial closing. It will suffice to say that this process is easier said than done.  If the funds are released after the date for the second closing, the foreign national will need to fund the 10% deficiency with their own funds to avoid boot on the exchange.

Is This Exchange Right For Me?
If you are a Foreign National selling US real estate and you plan to purchase additional real estate in the US, this exchange is right for you.

How To Get Started
Call our office at (513) 412-3483, our exchange coordinators are ready to discuss whether this type of exchange is right for you and how to get started. You may want to have your project details handy when we discuss your potential Foreign National Exchange. 

Click here to receive information on this Exchange