You have three options in how you proceed with selling and completing the compliance work for the sale of your U.S. property:
1. Do It Yourself
It may be tempting to undertake the process on your own. See our guide to selling your U.S. property for the steps involved. Unless you’ve been through this process before, you should be aware of potential issues, such as:
- Ensuring you determine the correct withholding rate or exemption so the correct amount is sent to the IRS.
- Determining the appropriate compliance forms that need to be submitted, and the required submission deadlines.
- Errors in completing the required compliance forms. If there are errors at this stage, it could cause serious issues:
- The IRS may not be able to properly apply the withholding to your account which will impact the subsequent filing of your tax return, and will require lots of follow up directly with the IRS.
- Your potential tax refund could be delayed or rejected, again requiring much follow up with the IRS.
- Your ITIN (Individual Taxpayer Identification Number) application may not be correctly completed and/or the appropriate substantiating documentation isn’t included. This can result in:
- Delays in processing your application, or
- A rejection of your application.
2. Use a Number of Different Service Providers
There are a number of different service providers that are typically involved in the process:
- Title/Escrow agent
- Provider to assist with completing the FIRPTA compliance forms
- Provider to assist with your ITIN application and certification of identity documents
- U.S. tax preparation service
- The IRS
- Canadian tax preparation service
The difficulty with this option is that each of these providers is independent of the others and isn’t necessarily familiar with the other steps in the process. As a result, there is a chance that some things might get overlooked, causing potential problems, errors, or complications. Furthermore, you’ll be assuming the role of project manager, making sure everyone’s on the same page.
3. FIRPTA CANADA: Your One-Stop, Stressless Solution
Why take the risk of having problems or errors arise? Like our country’s national animal, we work industriously on your project until it’s successfully completed.
Prepare all required compliance forms relating to FIRPTA
Provide your title or escrow company with all required FIRPTA documentation
After the closing of your sale, we will:
Assist you in obtaining an ITIN (Individual Taxpayer Identification Number) and certify the identity documents for each of the owners of the property.
As an IRS Certified Acceptance Agent, we’ve helped many Canadians obtain an ITIN in the most expedient manner possible.
File the U.S. federal and state tax return, and Canadian tax return for each seller.
Let the Eager Beavers Handle the Entire FIRPTA Process for You
Sit back and relax, and let us chew away at your transaction from start to finish. To make it as easy as possible for you, we can work with you in person, virtually, or a combination of both. As your fellow Canadians, we won’t let you down.
Contact us today to start the process and we’ll respond within two business days, unless it is tax season as we may take a bit longer.