IRS practice unit: Taxation of the disposition of U.S. real property interests (USRPI) by foreign persons

Taxation of the disposition of USRPI by foreign persons

The IRS Large Business and International (LB&I) division publicly released a “practice unit”—part of a series of IRS examiner “job aides” and training materials intended to describe for IRS agents leading practices about tax concepts in general and specific types of transactions—that concerns the tax treatment of dispositions of U.S. real property interests (USRPI) by foreign persons.

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The title of this “concept unit” (as referred to by the IRS) is: Taxation on the disposition of USRPI by foreign persons

This practice unit was updated to clarify that publicly traded stock of a corporation continues to not be USRPI if held by a 5% or less shareholder. The 5% threshold was increased to 10% only for real estate investment trusts (REITs) under the Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”).

Read the concept unit on the IRS practice unit webpage (posting date of May 26, 2020).

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