FIRPTA — the Foreign Investment in Real Property Tax Act — requires that when a foreign person sells U.S. real estate, a percentage of the gross sale price be withheld and remitted to the IRS as a prepayment toward any capital gains tax owed. The buyer is legally responsible for the withholding, but in practice the title/settlement company facilitates it at closing, collecting the required amount and handling the paperwork. Exemptions and reduced-withholding certificates can apply depending on the price and the buyer’s intended use. We coordinate FIRPTA withholding at closing and recommend foreign sellers also consult a tax professional, since the rules are detailed.