Form 8288 Instructions
Instructions for Form 8288, U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests
Rev. January 2023
Related Forms
- Form 8288 - U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests
Department of the Treasury
Internal Revenue Service
Instructions for Form 8288
(Rev. January 2023)
(Use with the January 2023 revision of Form 8288)
U.S. Withholding Tax Return for Certain Dispositions by Foreign Persons
Section references are to the Internal Revenue Code
unless otherwise noted.
Contents
Page
Contents
Page
General Instructions for Section 1445
Buyer/Transferee Claiming Refund of Section
Part I—To Be Completed by the Buyer or
Other Transferee Required To Withhold
Part II—To Be Completed by an Entity
Subject to the Provisions of Section
Part III—To Be Completed by Buyer/
Transferee Required To Withhold Under
Part IV—To Be Completed by the Partnership
Required To Withhold Under Section
Part V—To Be Completed by Buyer/
Transferee Claiming a Refund of
Future Developments
For the latest information about developments related to
Form 8288 and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
General Instructions for Section 1446(f)(1)
What's New
The Tax Cuts and Jobs Act added section 1446(f),
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effective January 1, 2018, which generally requires that if
any portion of the gain on a disposition of an interest in a
partnership would be treated under section 864(c)(8) as
gain effectively connected with the conduct of a trade or
business in the United States, the transferee purchasing
the interest in the partnership from a non-U.S. transferor
must withhold a tax equal to 10% of the amount realized
on the disposition unless an exception to withholding
applies.
Exceptions to Section 1446(f)(1) Withholding
Transfers of Partnership Interests Subject to
Withholding Under Sections 1445(e)(5)
Notice 2018-08, 2018-07 I.R.B. 352, available at
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IRS.gov/IRB/2018-07_IRB#NOT-2018-08, temporarily
suspended the application of section 1446(f) to the
transfer of publicly traded partnership (PTP) interests.
General Instructions for Section 1446(f)(4)
Notice 2018-29, 2018-16 I.R.B. 495, available at
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IRS.gov/IRB/2018-16_IRB#NOT-2018-29, provided
interim guidance under section 1446(f)(1) on withholding
Jan 11, 2023
Cat. No. 57528F
related to transfers of non-PTP interests and temporarily
suspended withholding under section 1446(f)(4).
subject to sections 1445 and 1446(f)(1). It is also used to
report and transmit amounts withheld under section
1446(f)(4) or to claim a credit or refund for amounts
withheld under section 1446(f)(4) for transfers occurring
on or after January 1, 2023.
Section 1445 withholding. A withholding obligation
under section 1445 is generally imposed on the buyer or
other transferee (withholding agent) when a U.S. real
property interest (USRPI) is acquired from a foreign
person. The withholding obligation also applies to foreign
and domestic corporations, qualified investment entities
(QIEs), and the fiduciaries of certain trusts and estates
that make certain distributions. This withholding serves to
collect U.S. tax that may be owed by the foreign person.
Proposed regulations under section 1446(f), available
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issued on May 7, 2019, for transfers of both non-PTP and
PTP interests. During the period that Notice 2018-29
applied, instead of applying the rules described in the
Notice, taxpayers and other affected persons may choose
to apply Regulations sections 1.1446(f)-1, 1.1446(f)-2,
and 1.1446(f)-5 of the proposed regulations in their
entirety to all transfers as if they were final regulations.
T.D. 9926, published on November 30, 2020, available
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regulations (the section 1446(f) regulations) relating to
withholding and reporting required under section 1446(f)
(1), including requirements that apply to brokers effecting
transfers of PTP interests and partnership withholding
under section 1446(f)(4) (on distributions to a transferee
that failed to properly withhold under section 1446(f)(1)).
The section 1446(f) regulations also revise certain
requirements under section 1446(a) relating to
If an exception applies, you may be required to
withhold at a reduced rate or you may not be
TIP
required to withhold. See Exceptions to Section
1445 Withholding, later.
Section 1446(f)(1) withholding. Section 1446(f)(1)
generally imposes a withholding obligation on the buyer or
other transferee (withholding agent) on a transfer of an
interest in a partnership (including a distribution made with
respect to such interest) by a foreign person (transferor) if:
withholding and reporting on distributions made by PTPs.
The section 1446(f) regulations generally apply to
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transfers occurring on or after January 29, 2021.
However, in accordance with Notice 2021-51, 2021-36
I.R.B. 361, available at IRS.gov/IRB/
1. The transferor realized a gain on the sale, and
2021-36_IRB#NOT-2021-51, the following provisions of
the section 1446(f) regulations apply to transfers
occurring on or after January 1, 2023:
2. Any portion of the gain would be treated under
section 864(c)(8) as effectively connected with the
conduct of a trade or business within the United States.
a. Withholding and reporting on transfers of PTP
If an exception applies, you may be required to
interests,
withhold at a reduced rate or you may not be
TIP
b. The revisions included in the section 1446(f)
regulations relating to withholding on PTP distributions
under section 1446(a), and
required to withhold. See Exceptions to Section
later.
c. Partnership withholding under section 1446(f)(4)
on distributions to a transferee that failed to properly
withhold under section 1446(f)(1).
Section 1446(f)(4) withholding. Section 1446(f)(4)
generally imposes a withholding obligation on a
partnership that makes a distribution with respect to the
transferee of a partnership interest that failed to withhold
the required amount under section 1446(f)(1). A
transferee may claim a refund for the excess amount if the
partnership has withheld amounts in excess of the tax and
interest owed by the transferee.
To reflect the withholding and reporting requirements
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under sections 1446(f)(1) and (f)(4), applicable to
transfers occurring on or after January 1, 2023, updated
Forms 8288 and 8288-A and a new Form 8288-C are
being released.
These instructions have been updated to incorporate
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the use of this form for a transferee of a non-PTP interest
required to withhold under section 1446(f)(1) on the
amount realized from the transfer and for partnership
withholding under section 1446(f)(4) on distributions to a
transferee that failed to withhold under section 1446(f)(1).
If an exception applies, the partnership may not
be required to withhold. See Exceptions to
Section 1446(f)(4) Withholding, later.
TIP
When not to use Forms 8288 and 8288-A. Do not use
Forms 8288 and 8288-A, instead use Forms 1042 and
1042-S to report and pay over these withheld amounts for
any of the following.
1. A distribution with respect to gains from the
disposition of a USRPI from a trust that is regularly traded
on an established securities market is subject to section
1445 but is not reported on Forms 8288 and 8288-A.
The General Instructions have been subdivided into
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three major sections:
Withholding, and
2. A dividend distribution by a qualified investment
entity (QIE) to a nonresident alien or a foreign corporation
that is attributable to gains from sales or exchanges of a
USRPI by the QIE. However, a dividend distribution by a
QIE is not subject to withholding under section 1445 as a
gain from the sale or exchange of a USRPI if:
General Instructions
Purpose of Form
Form 8288 is used to report and transmit amounts
withheld on certain dispositions and distributions that are
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Instructions for Form 8288 (Rev. 01-2023)
a. The distribution is on stock regularly traded on a
securities market in the United States, and
2. Withhold on the total amount allocated to foreign
transferors.
b. The nonresident alien or foreign corporation did not
own more than 10% (for dispositions and distributions
before December 17, 2015, did not own more than 5% of
such stock in the case of a real estate investment trust
(REIT)) of that stock at any time during the 1-year period
ending on the date of the distribution.
3. Credit the amount withheld among the foreign
transferors as they mutually agree. The transferors must
request that the withholding be credited as agreed upon
by the 10th day after the date of transfer. If no agreement
is reached, credit the withholding by evenly dividing it
among the foreign transferors.
The dividend distribution, however, may be subject to
When To File
withholding under section 1441 or 1442.
A transferee must file Form 8288 and transmit the tax
withheld to the IRS by the 20th day after the date of
transfer.
3. A distribution of effectively connected taxable
income by a PTP that is subject to the withholding
requirements of section 1446(a).
You must withhold even if an application for a
withholding certificate is or has been submitted to the IRS
on the date of transfer. However, you do not have to file
Form 8288 and transmit the withholding until the 20th day
after the day the IRS mails you a copy of the withholding
certificate or notice of denial. But, if the principal purpose
for filing the application for a withholding certificate was to
delay paying the IRS the amount withheld, interest and
penalties will apply to the period beginning on the 21st
day after the date of transfer and ending on the day full
payment is made.
Installment payments. You must withhold the full
amount at the time of the first installment payment. If you
cannot because the payment does not involve sufficient
cash or other liquid assets, you may obtain a withholding
certificate from the IRS. See the instructions for Form
8288-B for more information.
4. The transfer of a PTP interest (including a
distribution made with respect to the PTP interest) that is
subject to withholding under section 1446(f)(1).
General Instructions for Section 1445
Withholding
A withholding obligation under section 1445 is generally
imposed on the buyer or other transferee (withholding
agent) when a USRPI is acquired from a foreign person.
The withholding obligation also applies to foreign and
domestic corporations, QIEs, and the fiduciaries of certain
trusts and estates.
Who Must File
A buyer or other transferee of a USRPI must complete and
file Part I of Form 8288 to report and transmit the amount
withheld. A corporation, QIE, or fiduciary that is required
to withhold tax under section 1445(e) must complete and
file Part II of Form 8288 to report and transmit the amount
withheld. If two or more persons are joint transferees,
each is obligated to withhold. However, the obligation of
each will be met if one of the joint transferees withholds
and transmits the required amount to the IRS.
Where To File
Send Form 8288 with the amount withheld, and copies A
and B of Form(s) 8288-A to:
Ogden Service Center
P.O. Box 409101
Ogden, UT 84409
Amount To Withhold
Generally, you must withhold 15% of the amount realized
Forms 8288-A Must Be Attached
Anyone who completes Form 8288 must also complete a
Form 8288-A for each person subject to withholding.
Copies A and B of Form 8288-A must be attached to Form
8288. Copy C is for your records. Multiple Forms 8288-A
related to a single transaction can be filed with one Form
8288. You are not required to furnish a copy of Form 8288
or 8288-A directly to the transferor.
Note. Prior to February 17, 2016, the transferor was
generally required to withhold 10% of the amount realized
on the disposition.
For information about:
Withholding at 21% (35% for distributions made before
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later;
The IRS will stamp Copy B of each Form 8288-A and
will forward the stamped copy to the foreign person
subject to withholding at the address shown on Form
8288-A. To receive credit for the withheld amount, the
transferor must generally attach the stamped Copy B of
Form 8288-A to a U.S. income tax return (for example,
Form 1040-NR or 1120-F) or application for early refund
filed with the IRS.
Transferor's taxpayer identification number (TIN)
missing. If you do not have the transferor's TIN, you
must still file Forms 8288 and 8288-A. A stamped copy of
Form 8288-A will not be provided to the transferor if the
transferor’s TIN is not included on that form. The IRS will
send a letter to the transferor requesting the TIN and
Withholding at a reduced amount, see Purchase of
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Applying for reduction or elimination of withholding, see
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Joint transferors. If one or more foreign persons and
one or more U.S. persons jointly transfer a USRPI, you
must determine the amount subject to withholding in the
following manner.
1. Allocate the amount realized from the transfer
among the transferors based on their capital contribution
to the property. For this purpose, a husband and wife are
treated as having contributed 50% each.
Instructions for Form 8288 (Rev. 01-2023)
-3-
providing instructions for how to get a TIN. When the
transferor provides the IRS with a TIN, the IRS will provide
the transferor with a stamped Copy B of Form 8288-A.
Such other QIE is a regulated investment company
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(RIC) that issues certain redeemable securities.
Notwithstanding the above, the stock of the QIE will be
treated as held by a U.S. person if such other QIE is
domestically controlled.
Penalties
Under section 6651, penalties apply for failure to file Form
8288 when due and for failure to pay the withholding when
due. In addition, if you are required to but do not withhold
tax under section 1445, the tax, including interest, may be
collected from you. Under section 7202, you may be
subject to a penalty of up to $10,000 for willful failure to
collect and pay over the tax. Corporate officers or other
responsible persons may be subject to a penalty under
section 6672 equal to the amount that should have been
withheld and paid over to the IRS.
3. Stock in a QIE that is held by any other QIE not
described above will be treated as held by a U.S. person
in proportion to the stock ownership of such other QIE
which is (or is treated as) held by a U.S. person.
Foreign person. A nonresident alien individual, a foreign
corporation that does not have a valid election under
section 897(i) to be treated as a domestic corporation, a
foreign partnership, a foreign trust, or a foreign estate. A
resident alien individual is not a foreign person.
A qualified foreign pension fund or any entity wholly
owned by such fund is not a foreign person for purposes
of section 1445. See sections 897(l) and 1445(f)(3) for
more information.
Definitions for Section 1445 Withholding
Agent. An agent is any person who represents the
transferor or transferee in any negotiation with another
person (or another person’s agent) relating to the
transaction or in settling the transaction.
Amount realized. The sum of the cash paid or to be paid
(not including interest or original issue discount), the fair
market value of other property transferred or to be
transferred, and the amount of any liability assumed by
the transferee or to which the USRPI is subject
immediately before and after the transfer. Generally, the
amount realized for purposes of this withholding is the
sales or contract price.
Date of transfer. The first date on which consideration is
paid or a liability is assumed by the transferee. However,
for purposes of sections 1445(e)(2), (3), and (4), and
Regulations sections 1.1445-5(c)(1)(iii) and 1.1445-5(c)
(3), the date of transfer is the date of distribution that
creates the obligation to withhold. Payment of
Qualified investment entity (QIE). A QIE is:
Any REIT, and
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Any RIC which is a U.S. real property holding
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corporation or which would be a U.S. real property holding
corporation.
In determining if a RIC is a U.S. real property holding
corporation, the RIC is required to include as USRPIs its
holdings of stock in a RIC or REIT that is a U.S. real
property holding company, even if such stock is regularly
traded and the RIC did not own more than 10% of such
stock in the case of a REIT (5% for dispositions before
December 17, 2015) or 5% of such stock in the case of a
RIC, and even if such stock is domestically controlled.
Qualified substitute. For this purpose, a qualified
substitute is:
consideration does not include the payment before
passage of legal or equitable title of earnest money (other
than pursuant to an initial purchase contract), a good-faith
deposit, or any similar amount primarily intended to bind
the parties to the contract and subject to forfeiture. A
payment that is not forfeitable may also be considered
earnest money, a good-faith deposit, or a similar sum.
The person (including any attorney or title company)
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responsible for closing the transaction, other than the
transferor’s agent; and
The transferee’s agent.
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Transferee. Any person, foreign or domestic, that
acquires a USRPI by purchase, exchange, gift, or any
other transfer.
Domestically controlled QIE. A QIE is domestically
controlled if at all times during the testing period less than
50% in value of its stock was held, directly or indirectly, by
foreign persons. The testing period is the shorter of:
Transferor. For purposes of this withholding, this means
any foreign person that disposes of a USRPI by sale,
exchange, gift, or any other disposition. A disregarded
entity cannot be the transferor for purposes of section
1445. Instead, the person considered as owning the
assets of the disregarded entity for federal tax purposes is
regarded as the transferor. A disregarded entity for
these purposes means an entity that is disregarded as an
entity separate from its owner under Regulations section
301.7701-3, a qualified REIT subsidiary as defined in
section 856(i), or a qualified subchapter S subsidiary
under section 1361(b)(3)(B).
Transferee’s or transferor’s agent. For purposes of
section 1445(e), a transferee’s or transferor’s agent is any
person who represents or advises an entity, a holder of an
interest in an entity, or a fiduciary with respect to the
planning, arrangement, or completion of a transaction
described in sections 1445(e)(1) through (4).
The 5-year period ending on the date of the disposition
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(or distribution), or
The period during which the entity was in existence.
For the purpose of determining whether a QIE is
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domestically controlled, the following rules apply.
1. A person holding less than 5% of any class of stock
of a QIE which is regularly traded on an established
securities market in the United States at all times during
the testing period will be treated as a U.S. person unless
the QIE has actual knowledge that such person is not a
U.S. person.
2. Any stock in a QIE that is held by another QIE will
be treated as held by a foreign person if:
Any class of stock of such other QIE is regularly traded
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on an established securities market, or
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Instructions for Form 8288 (Rev. 01-2023)
take into account the number of days the property will be
vacant in making this determination. No form or other
document is required to be filed with the IRS for this
exception. However, if you do not in fact use the property
as a residence, the withholding tax may be collected from
you.
This exception applies whether or not the transferor
(seller) is an individual, partnership, trust, corporation, or
other transferor. However, this exception does not apply if
the actual transferee (buyer) is not an individual, even if
the property is acquired for an individual.
U.S. real property interest (USRPI). Any interest, other
than an interest solely as a creditor, in the following.
1. Real property located in the United States or the
U.S. Virgin Islands.
2. Certain personal property associated with the use of
real property.
3. A domestic corporation, unless it is shown that the
corporation was not a U.S. real property holding
corporation during the previous 5 years (or during the
period in which the transferor held the interest, if shorter).
A USRPI does not include the following.
1. An interest in a domestically controlled QIE.
2. An interest in a REIT that is held by a qualified
shareholder. For the definition of a qualified shareholder,
see section 897(k)(3). But see section 897(k)(2)(B) for the
cut-back rule if the qualified shareholder has one or more
applicable investors.
Transferor not a foreign person. Generally, no
withholding is required if you receive a certification of
nonforeign status from the transferor, signed under
penalties of perjury, stating that the transferor is not a
foreign person and containing the transferor’s name,
address, and TIN (social security number (SSN) or
employer identification number (EIN)). A certification of
nonforeign status includes a valid Form W-9 submitted by
the transferor. The transferor can give the certification to a
qualified substitute (defined earlier). The qualified
substitute gives you a statement, under penalties of
perjury, that the certification is in the qualified substitute’s
possession.
If you receive a certification (or statement), the
withholding tax cannot be collected from you unless you
knew that the certification (or statement) was false or you
received a notice from your agent, the transferor’s agent,
or the qualified substitute that it was false. The
certification must be signed by the individual, a
responsible officer of a corporation, a general partner of a
partnership, or the trustee, executor, or fiduciary of a trust
or estate.
3. An interest in a corporation that:
Did not hold any USRPI as of the date the interest in
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such corporation is disposed,
Has disposed of all its USRPIs in transactions in which
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the full amount of any gain was recognized as provided in
section 897(c)(1)(B), and
Neither such corporation nor any predecessor of such
•
corporation was a REIT or a RIC at any time during the
shorter of the previous 5 years or the period in which the
transferor held the interest.
4. An interest in certain publicly traded corporations,
partnerships, and trusts.
See Regulations sections 1.897-1 and 1.897-2 for more
information. Also see Transferred property that isn’t a
USRPI, later.
Withholding agent. For purposes of this return, this
means the buyer or other transferee who acquires a
USRPI from a foreign person.
A disregarded entity may not certify that it is the
transferor for U.S. tax purposes. Rather, the owner of the
disregarded entity is treated as the transferor of the
property and must provide the certificate of nonforeign
status to avoid withholding under section 1445.
Exceptions to Section 1445 Withholding
Withholding at a Reduced Rate
A foreign corporation electing to be treated as a
domestic corporation under section 897(i) must attach to
the certification a copy of the acknowledgment of the
election received from the IRS. The acknowledgment
must state that the information required by Regulations
section 1.897-3 has been determined to be complete. If
the acknowledgment is not attached, you may not rely on
the certification. Keep any certification of nonforeign
status you receive in your records for 5 years after the
year of transfer.
A qualified foreign pension fund or any entity wholly
owned by such fund may provide a certification of
nonforeign status to establish that it is not a foreign person
for purposes of section 1445. See sections 897(l) and
1445(f)(3) for more information.
You may also use other means to determine that the
transferor is not a foreign person. But if you do and it is
later determined that the transferor is a foreign person, the
withholding tax may be collected from you.
Late notice of false certification. If, after the date of
transfer, you receive a notice from your agent, the
transferor’s agent, or the qualified substitute that the
certification of nonforeign status is false, you do not have
Purchase of residence for $1 million or less.
Withholding is required at a reduced rate of 10% in the
case of a disposition of:
A property which is acquired by the transferee for use
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by the transferee as a residence, and
The amount realized for the property is $1 million or
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less. However, see Purchase of residence for $300,000 or
less, next.
Withholding Not Required
Purchase of residence for $300,000 or less. If one or
more individuals acquire U.S. real property for use as a
residence and the amount realized (in most cases, the
sales price) is $300,000 or less, no withholding is
required.
A USRPI is acquired for use as a residence if you or a
member of your family has definite plans to reside in the
property for at least 50% of the number of days the
property is used by any person during each of the first two
12-month periods following the date of transfer. Do not
Instructions for Form 8288 (Rev. 01-2023)
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to withhold on consideration paid before you received the
notice. However, you must withhold the full 15% of the
amount realized from any consideration that remains to be
paid, if possible. You must do this by withholding and
paying over the entire amount of each successive
payment of consideration until the full 15% has been
withheld and paid to the IRS. These amounts must be
reported and transmitted to the IRS by the 20th day
following the date of each payment.
Transferred property that isn’t a USRPI. If you acquire
an interest in property that is not a USRPI (defined under
U.S. real property interest (USRPI), earlier), withholding is
generally not required. A USRPI includes certain interests
in U.S. corporations, as well as direct interests in real
property and certain associated personal property.
No withholding is required on the acquisition of an
interest in a domestic corporation if (a) any class of stock
of the corporation is regularly traded on an established
securities market, or (b) the transferee receives a
statement issued by the corporation that the interest is not
a USRPI, unless you know that the statement is false or
you receive a notice from your agent or the transferor’s
agent that the statement is false. A corporation’s
statement may be relied on only if it is dated not more than
30 days before the date of transfer.
Late notice of false statement. If, after the date of
transfer, you receive a notice indicating that the statement
Generally, no withholding is required on the acquisition
of an interest in a foreign corporation. However,
withholding may be required if the foreign corporation has
made the election under section 897(i) to be treated as a
domestic corporation.
Transferor’s nonrecognition of gain or loss. You may
receive a notice from the transferor signed under
penalties of perjury stating that the transferor is not
required to recognize gain or loss on the transfer because
of a nonrecognition provision of the Internal Revenue
Code (see Temporary Regulations section 1.897-6T(a)
(2)) or a provision in a U.S. tax treaty. You may rely on the
transferor’s notice, and not withhold, unless (a) only part
of the gain qualifies for nonrecognition, or (b) you know or
have reason to know that the transferor is not entitled to
the claimed nonrecognition treatment.
A notice of nonrecognition cannot be used for the
exclusion from income under section 121,
like-kind exchanges that do not qualify for
!
CAUTION
nonrecognition treatment in their entirety, and deferred
like-kind exchanges that have not been completed when it
is time to file Form 8288. In these cases, a withholding
certificate issued by the IRS, as described next, must be
obtained.
Withholding certificate issued by the IRS. A
withholding certificate may be issued by the IRS to reduce
or eliminate withholding on dispositions of USRPIs by
foreign persons. Either a transferee or transferor may
apply for the certificate. The certificate may be issued if:
Reduced withholding is appropriate because the 10%,
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15%, or 21% (35% for distributions made before January
1, 2018) amount exceeds the transferor’s maximum tax
liability;
The transferor is exempt from U.S. tax or
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nonrecognition provisions apply; or
The transferee or transferor enters into an agreement
•
with the IRS for the payment of the tax.
An application for a withholding certificate must comply
with the provisions of Regulations sections 1.1445-3 and
1.1445-6, and Rev. Proc. 2000-35, 2000-35 I.R.B. 211.
You can find Rev. Proc. 2000-35 at IRS.gov/pub/irs-irbs/
irb00-35.pdf. In certain cases, you may use Form 8288-B
to apply for a withholding certificate. The IRS will normally
act on an application by the 90th day after a complete
application is received.
If you receive a withholding certificate from the IRS that
excuses withholding, you are not required to file Form
8288. However, if you receive a withholding certificate that
reduces (rather than eliminates) withholding, there is no
exception to withholding, and you are required to file Form
8288. Attach a copy of the withholding certificate to Form
Section 1445 Withholding, earlier, for more information.
No consideration paid. Withholding is not required if the
amount realized by the transferor is zero (for example, the
property is transferred as a gift and the recipient does not
assume any liabilities or furnish any other consideration to
the transferor).
Options to acquire USRPIs. No withholding is required
with respect to any amount realized by the grantor on the
grant or lapse of an option to acquire a USRPI. However,
withholding is required on the sale, exchange, or exercise
of an option.
No particular form is required for this notice. By the
20th day after the date of transfer, you must send a copy
of the notice of nonrecognition (with a cover letter giving
your name, address, and TIN) to:
Property acquired by a governmental unit. If the
property is acquired by the United States, a U.S. state or
possession or political subdivision, or the District of
Columbia, withholding is generally not required.
Ogden Service Center
P.O. Box 409101
Ogden, UT 84409
For rules that apply to foreclosures, see Regulations
See Regulations section 1.1445-2(d)(2) for more
section 1.1445-2(d)(3).
information on the transferor’s notice of nonrecognition.
Applicable wash sale transaction. If a distribution from
a domestically controlled QIE is treated as a distribution of
a USRPI only because an interest in the entity was
disposed of in an applicable wash sale transaction,
withholding is generally not required. See section 897(h)
(5).
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Instructions for Form 8288 (Rev. 01-2023)
corporations, QIEs, trusts, and estates. A domestic trust
or estate must withhold 21% (35% for distributions made
before January 1, 2018) of the amount distributed to a
foreign beneficiary from a “U.S. real property interest
account” that it is required to establish under Regulations
section 1.1445-5(c)(1)(iii). A foreign corporation that has
not made the election under section 897(i) must withhold
21% (35% for distributions made before January 1, 2018)
of the gain it recognizes on the distribution of a USRPI to
its shareholders. Certain domestic corporations are
required to withhold tax on distributions to foreign
shareholders.
No withholding is required on the transfer of an interest
in a domestic corporation if any class of stock of the
corporation is regularly traded on an established
securities market. Also, no withholding is required on the
transfer of an interest in a PTP or trust.
Late Filing of Certification or Notice
You may be eligible for relief for a late filing if a statement
or notice was not provided to the relevant person or the
IRS by the specified deadline and if you have reasonable
cause for the failure to make a timely filing. Once you
become aware that you have failed to timely file certain
certificates or notices, you must file the required
certification or notice with the appropriate person or the
IRS. Also include the following.
A statement at the top of the document(s) that it is
•
“FILED PURSUANT TO REV. PROC. 2008-27.”
An explanation describing why the failure was due to
•
reasonable cause. Within the explanation, provide that
you filed with, or obtained from, an appropriate person the
required certification or notice.
The completed certification or notice attached to the
explanation must be sent to:
No withholding will be required with respect to an
interest holder if the entity or fiduciary receives a
Ogden Service Center
P.O. Box 409101
certification of nonforeign status from the interest holder.
A certification of nonforeign status includes a valid Form
W-9 submitted by the transferor. An entity or fiduciary may
also use other means to determine that an interest holder
is not a foreign person, but if it does so and it is later
determined that the interest holder is a foreign person, the
withholding may be collected from the entity or fiduciary.
Ogden, UT 84409
For more information, see Rev. Proc. 2008-27, 2008-21
I.R.B. 1014, available at IRS.gov/IRB/
Liability of Agents
transferor’s certification of nonforeign status, or (b) a
corporation’s statement that an interest is not a USRPI,
substitute, knows the document is false, the agent (or
substitute) must notify you. If notification is not provided,
the agent (or substitute) will be liable for the tax that
should have been withheld, but only to the extent of the
agent’s (or substitute’s) compensation from the
transaction.
If you (or the substitute) receive a notice of false
agent, or the qualified substitute, you must withhold tax as
if you had not received a certification or statement. See
Late notice of false certification, earlier.
Section 1445(e)(1) Transactions
Partnerships. A domestic partnership that is not publicly
traded must withhold tax under section 1446(a) on
effectively connected taxable income allocated to its
foreign partners and must file Forms 8804 and 8805. A
PTP or nominee must generally withhold tax under section
1446(a) on distributions to its foreign partners and must
file Forms 1042 and 1042-S. Because a domestic
partnership that disposes of a USRPI is required to
withhold under section 1446(a), it is not required to
withhold under section 1445(e)(1).
Trusts and estates. If a domestic trust or estate
disposes of a USRPI, the amount of gain realized must be
paid into a separate “USRPI account.” For these
purposes, a domestic trust is one that does not make the
large trust election (explained next), is not a QIE, and is
not publicly traded. The fiduciary must withhold 21% (35%
for distributions made before January 1, 2018) of the
amount distributed to a foreign person from the account
during the tax year of the trust or estate in which the
disposition occurred. The withholding must be paid over
to the IRS within 20 days of the date of distribution.
Special rules apply to grantor trusts. See Regulations
section 1.1445-5 for more information and how to
compute the amount subject to withholding.
Large trust election. Trusts with more than 100
beneficiaries may make an election to withhold upon
distribution rather than at the time of transfer. The amount
to be withheld from each distribution is 21% (35% for
distributions made before January 1, 2018) of the amount
attributable to the foreign beneficiary’s proportionate
share of the current balance of the trust’s section 1445(e)
(1) account. This election does not apply to any QIE or to
any publicly traded trust. Special rules apply to large trusts
that make recurring sales of growing crops and timber.
A person is not treated as an agent if the person only
performs one or more of the following acts in connection
with the transaction.
1. Receiving and disbursing any part of the
consideration.
2. Recording any document.
3. Typing, copying, and other clerical tasks.
4. Obtaining title insurance reports and reports
concerning the condition of the property.
5. Transmitting documents between the parties.
6. Functioning exclusively in his or her capacity as a
representative of a condominium association or
cooperative housing corporation. This exemption includes
the board of directors, the committee, or other governing
body.
Entities Subject to Section 1445(e)
Withholding under section 1445(e) is required on certain
distributions and other transactions by domestic or foreign
Instructions for Form 8288 (Rev. 01-2023)
-7-
A trust’s section 1445(e)(1) account is the total net gain
realized by the trust on all section 1445(e)(1) transactions
after the date of the election, minus the total of all
distributions made by the trust after the date of the
election from such total net gain. See Regulations section
1.1445-5(c)(3) for more information.
cash or cash equivalents. The transferee may rely on the
statement unless the transferee knows it is false or the
transferee receives a false statement notice pursuant to
Regulations section 1.1445-4.
A disposition of a partnership interest that meets
this exception may instead be subject to
!
CAUTION
withholding under section 1446(f)(1). See
Section 1445(e)(2) Transactions
A foreign corporation that distributes a USRPI must
generally withhold 21% (35% for distributions made
before January 1, 2018) of the gain recognized by the
corporation. No withholding or reduced withholding is
required if the corporation receives a withholding
certificate from the IRS.
Section 1445(e)(6) Transactions
A QIE must withhold 21% (35% for distributions made
before January 1, 2018) of a distribution to a nonresident
alien or a foreign corporation that is treated as gain
realized from the sale or exchange of a USRPI. No
withholding under section 1445 is required on a
Section 1445(e)(3) Transactions
Generally, a domestic corporation that distributes any
property to a foreign person that holds an interest in the
corporation must withhold 15% (10% for distributions
before February 17, 2016) of the fair market value of the
property distributed if:
distribution to a nonresident alien or foreign corporation if
the distribution is on stock regularly traded on a securities
market in the United States and the alien or corporation
did not own more than 10% (for distributions before
December 17, 2015, did not own more than 5% of such
stock in case of a REIT) of that stock at any time during
the 1-year period ending on the date of distribution.
The foreign person’s interest in the corporation is a
•
USRPI under section 897; and
The property is distributed in redemption of stock under
•
section 302, in liquidation of the corporation under
sections 331 through 346, or with respect to stock under
section 301 that is not made out of the earnings and
profits of the corporation.
A distribution made after December 17, 2015, by a
REIT is generally not treated as gain from the sale or
exchange of a USRPI if the shareholder is a qualified
shareholder (as described in section 897(k)(3)).
No withholding or reduced withholding is required if the
corporation receives a withholding certificate from the
IRS.
General Instructions for Section
1446(f)(1) Withholding
Section 1446(f)(1) generally imposes a 10% withholding
obligation on the buyer or other transferee (withholding
agent) when an interest in a partnership is acquired from a
foreign person (transferor) if:
Section 1445(e)(4) Transactions
No withholding is required under section 1445(e)(4),
relating to certain taxable distributions by domestic or
foreign partnerships, trusts, and estates, until the effective
date of a Treasury Decision under section 897(e)(2)(B)(ii)
and (g).
1. The transferor realized a gain on the sale, and
2. Any portion of the gain would be treated under
section 864(c)(8) as effectively connected with the
conduct of a trade or business within the United States
(effectively connected gain).
Though withholding is not currently required under
section 1445(e)(4), withholding may be required
!
CAUTION
under section 1446(f)(1) on the amount realized
A transfer can occur when a partnership distribution
results in gain under section 731. Under section 1446(f)
(4), if the transferee fails to withhold any required amount,
the partnership must deduct and withhold from
when a domestic or foreign partnership makes a
distribution to a foreign partner.
Section 1445(e)(5) Transactions
distributions to the transferee the amount that the
transferee failed to withhold (plus interest). See General
The transferee of a partnership interest must withhold
15% (10% for dispositions before February 17, 2016) of
the amount realized on the disposition by a foreign partner
of an interest in a domestic or foreign partnership in which
at least 50% of the value of the gross assets consists of
USRPIs and at least 90% of the value of the gross assets
consists of U.S. real property, interests plus any cash or
cash equivalents. However, no withholding is required
under section 1445(e)(5) for dispositions of interests in
other partnerships, trusts, or estates until the effective
date of a Treasury Decision under section 897(g). No
withholding is required if, no earlier than 30 days before
the transfer, the transferee receives a statement signed by
a general partner under penalties of perjury that at least
50% of the value of the gross assets of the partnership
does not consist of USRPIs or that at least 90% of the
value of the gross assets does not consist of USRPIs, plus
Who Must File
Unless any of exceptions 1 through 6 of the Exceptions to
Interests, later, applies, a buyer or other transferee of a
partnership interest must complete and file Part III of Form
8288 to report and transmit the amount withheld.
separate filing obligation.
Amount To Withhold
Generally, you must withhold 10% of the transferor’s
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Instructions for Form 8288 (Rev. 01-2023)
When To File
A transferee must file Form 8288 and transmit the tax
withheld to the IRS by the 20th day after the date of
transfer.
Foreign person. A person that is not a U.S. person,
including a qualified intermediary (QI) branch of a U.S.
financial institution (as defined in Regulations section
1.1471-1(b)(109)).
TIN. The TIN assigned to a person under section 6109.
Where To File
Transfer. A sale, exchange, or other disposition, which
includes a distribution from a partnership to a partner, as
well as a transfer treated as a sale or exchange under
section 707(a)(2)(B).
Transferee. Any person, foreign or domestic, that
acquires a partnership interest through a transfer, and
includes a partnership that makes a distribution.
Transferor. Generally means any person, foreign or
domestic, that transfers a partnership interest. In the case
of a trust, to the extent all or a portion of the income of the
trust is treated as owned by the grantor or another person
under sections 671 through 679 (such trust, a grantor
trust), the term “transferor” means the grantor or such
other person.
Send Form 8288 with the amount withheld, and copies A
and B of Form(s) 8288-A to:
Ogden Service Center
P.O. Box 409101
Ogden, UT 84409
Forms 8288-A Must Be Attached
Anyone who completes Form 8288 must also complete a
Form 8288-A for each person subject to withholding.
Copies A and B of Form 8288-A must be attached to Form
8288. Copy C is for your records. Multiple Forms 8288-A
related to a single transaction can be filed with one Form
8288. You are not required to furnish a copy of Form 8288
or 8288-A directly to the transferor.
Transferor’s agent or transferee’s agent. Any person
who represents the transferor or transferee (respectively)
in any negotiation with another person relating to the
transaction or in settling the transaction. A person will not
be treated as a transferor’s agent or a transferee’s agent
solely because it performs one or more of the activities
described in Regulations section 1.1445-4(f)(3) (relating
to activities of settlement officers and clerical personnel).
The IRS will stamp Copy B of each Form 8288-A and
will forward the stamped copy to the foreign person
subject to withholding at the address shown on Form
8288-A. To receive credit for the withheld amount, the
transferor must generally attach the stamped Copy B of
Form 8288-A to a U.S. income tax return (for example,
Form 1040-NR or 1120-F).
Transferor’s taxpayer identification number (TIN)
missing. If you do not have the transferor's TIN, you
must still file Forms 8288 and 8288-A. A stamped copy of
Form 8288-A will not be provided to the transferor if the
transferor’s TIN is not included on that form. The IRS will
send a letter to the transferor requesting the TIN and
provide instructions for how to get a TIN. When the
transferor provides the IRS with a TIN, the IRS will provide
the transferor with a stamped Copy B of Form 8288-A.
U.S. person. A person described in section 7701(a)(30).
Exceptions to Section 1446(f)(1) Withholding on
Transfers of Non-PTP Interests
A transferee, including a partnership when the partner is a
distributee, is not required to withhold on the transfer of a
non-PTP interest if it properly relies on one of the following
six certifications, the requirements of which are more fully
described in Regulations section 1.1446(f)-2(b) and Pub.
515. A transferee may not rely on a certification if it has
actual knowledge that the certification is incorrect or
unreliable. A certification must provide the name and
address of the person providing it, be signed under
penalties of perjury, and generally include the TIN of the
transferor. See Regulations sections 1.1446(f)-1(c)(2)(i)
and 1.1446(f)-2(b)(1). Only the certification for exception 6
(related to claims for treaty benefits) must be submitted to
the IRS.
Penalties
Under section 6651, penalties apply for failure to file Form
8288 when due and for failure to pay the withholding when
due. In addition, if you are required to but do not withhold
tax under section 1446(f)(1), the tax, including interest,
may be collected from you. Under section 7202, you may
be subject to a penalty of up to $10,000 for willful failure to
collect and pay over the tax. Corporate officers or other
responsible persons may be subject to a penalty under
section 6672 equal to the amount that should have been
withheld and paid over to the IRS. See Regulations
section 1.1461-3 for other penalties that may apply.
A partnership that is a transferee because it makes a
distribution may generally rely on a certification from a
transferor in the same manner, with the following
modifications.
Definitions for Section 1446(f)(1) Withholding
For exception 2, a distributing partnership may rely on
•
its books and records or on a certification from the
distributee partner.
Withhold, later.
For exception 3, a distributing partnership may only rely
•
Controlling partner. A partner that, together with any
person that bears a relationship described in section
267(b) or 707(b)(1) to the partner, owns directly or
indirectly a 50% or greater interest in the capital, profits,
deductions, or losses of the partnership at any time within
the 12 months before the determination date.
on its books and records.
For exception 4, a distributing partnership may only rely
•
on its books and records but must also obtain a
representation from the distributee partner stating that the
distributee partner satisfies the reporting and tax payment
requirements with respect to the partnership’s ECI for the
look-back period.
Instructions for Form 8288 (Rev. 01-2023)
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A partnership may not rely on its books and records if it
knows, or has reason to know, that the information in its
own books and records is incorrect or unreliable.
during the look-back period, was less than 10% of its total
distributive share of partnership gross income; and
4. For each year during the look-back period, the
transferor’s distributive share of partnership ECI or gain
(or losses properly allocated and apportioned to that
income) has been timely reported on a federal income tax
return of the transferor (or if the transferor was a
partnership, its direct or indirect nonresident alien and
foreign corporate partners) and any tax due with respect
to such amounts has been timely paid, provided the return
was required to be filed when the transferor furnishes the
certification.
Exceptions
The relevant information for many of the exceptions is
based on a determination date. See Regulations section
regarding the determination date.
1. Certification of nonforeign status. The transferor
provides a certification of nonforeign status signed under
penalties of perjury that states that the transferor is not a
foreign person, and provides the transferor’s name, TIN,
and address. A certification of nonforeign status includes
a valid Form W-9 (including a valid form that the
5. Certification of nonrecognition. The transferor
provides a certification that it is not required to recognize
any gain or loss with respect to the transfer by reason of
the operation of a nonrecognition provision of the Internal
Revenue Code. The certification must briefly describe the
transfer and provide the relevant law and facts relating to
the certification.
This exception does not apply if only a portion of the
gain is not recognized. In that case, the transferor may be
later, if the requirements under Regulations section
1.1446(f)-2(c)(4)(v) are met.
6. Certification that an income tax treaty applies. The
transferor provides a certification using Form W-8BEN or
W-8BEN-E, as applicable, or applicable substitute form
that meets the requirements under Regulations section
1.1446-1(c)(5) that the transferor is not subject to tax on
any gain from the transfer pursuant to an income tax
treaty. The form should contain the information necessary
to support the claim for treaty benefits. Within 30 days
after the date of the transfer, the transferee must mail a
copy of the certificate, together with a cover letter
providing the name, TIN, and address of the transferee
and the partnership in which the interest was transferred
Regulations section 1.1446(f)-2(b)(7).
transferee already has in its possession).
2. Certification of no realized gain. The transferor
provides a certification that, on the transfer of the
partnership interest, there was no realized gain (including
no ordinary income arising from the application of section
751 and Regulations section 1.751-1) as of the
determination date.
3. Certification of less than 10% effectively connec-
ted gain. The transferor provides a certification from the
partnership stating that:
1. On the deemed sale of the partnership assets in the
manner described in Regulations section 1.864(c)(8)-1(c)
as of the determination date either:
a. The partnership would have no effectively
connected gain (or the net amount of its effectively
connected gain would be less than the 10% of the total
net gain), or
b. The transferor’s distributive share of net effectively
connected gain resulting from the deemed sale would be
less than 10% of the transferor’s distributive share of the
total net gain; or
2. The partnership was not engaged in a trade or
business within the United States at any time during the
tax year of the partnership until the date of transfer.
The transferor may not provide this certification if any
portion of the gain is subject to tax. In that case, the
transferor may be able to provide a Certification of
maximum tax liability, later, if the requirements under
Regulations section 1.1446(f)-2(c)(4)(vi) are met.
4. Certification of less than 10% effectively connec-
ted income (ECI). The transferor provides a certification
that:
1. The transferor was a partner in the partnership for
the transferor’s immediately prior tax year (for which it has
already received a Schedule K-1 (Form 1065)) and the 2
preceding tax years (the look-back period) and had a
distributive share of gross income from the partnership in
each of these years;
2. The transferor’s distributive share of gross ECI from
the partnership, and from certain persons related to the
transferor, as reported on a Schedule K-1 (Form 1065) or
other statement required by the partnership, was less than
$1 million for each of the tax years during the look-back
period;
3. The transferor’s distributive share of partnership
gross ECI, as reported on a Schedule K-1 (Form 1065) or
other statement required by the partnership, for each year
Determining the Amount To Withhold
In general, the transferee must withhold 10% of the
amount realized. The amount realized includes the
following.
1. The cash paid (or to be paid),
2. The fair market value of property transferred (or to
be transferred),
3. The amount of any liabilities assumed by the
transferee or to which the partnership is subject, and
4. The reduction in the transferor’s share of
partnership liabilities.
The rules for determining the amount to withhold are
contained in Regulations section 1.1446(f)-2(c). See also
Pub. 515. If certain requirements are met, the transferee
may rely on a certification of the amount of the transferor's
share of partnership liabilities reported on the most recent
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Instructions for Form 8288 (Rev. 01-2023)
Schedule K-1 (Form 1065) issued by the partnership or a
certification from a partnership that provides the amount
of the transferor's share of partnership liabilities as of the
determination date.
Transfers of Partnership Interests Subject to
Withholding Under Sections 1445(e)(5) and
1446(f)(1)
The transfer of a partnership interest may be subject to
withholding under section 1445(e)(5) or Regulations
section 1.1445-11T(d)(1) if 50% or more of the value of
the partnership’s gross assets consists of USRPIs, and
90% or more of the value of its gross assets consists of
USRPIs plus any cash or cash equivalents. The transfer of
a partnership interest may also be subject to withholding
under section 1446(f)(1) and Regulations section
1.1446(f)-2, if the partnership also holds other property
used in the conduct of a trade or business within the
United States. If both sections 1445(e)(5) and 1446(f)(1)
could apply to the same transfer, the transfer is subject to
the payment and reporting requirements of section 1445
only and not section 1446(f)(1). However, if the transferor
has applied for a withholding certificate under the last
sentence of Regulations section 1.1445-11T(d)(1), the
transferee must withhold the greater of the amounts
required under section 1445(e)(5) or 1446(f)(1). A
transferee that has complied with the withholding
requirements under either section 1445(e)(5) or 1446(f)
(1), as described in this paragraph, will be deemed to
satisfy its withholding requirement.
Modified amount realized. If a foreign partnership is the
transferor, separate rules may apply to determine a
modified amount realized. The modified amount realized
is determined by multiplying the amount realized by the
aggregate percentage computed as of the determination
date. The aggregate percentage is the percentage of the
gain (if any) arising from the transfer that would be
allocated to any presumed foreign taxable persons. For
this purpose, a presumed foreign taxable person is any
person that has not provided a certification of nonforeign
withholding, or a certification that, pursuant to a tax treaty,
no portion of the foreign taxable person’s gain is subject to
tax. The foreign partnership claims the modified amount
realized by providing a certification on Form W-8IMY as
provided under Regulations section 1.1446(f)-2(c)(2)(iv).
The transferee should not submit the certification to the
IRS for approval.
Lack of money or property or lack of knowledge re-
garding liabilities. Under certain circumstances, the
amount that the transferee must withhold equals 100% of
the amount realized without regard to any decrease in the
transferor’s share of the partnership liabilities. These
circumstances are if:
1. The amount otherwise required to be withheld
would exceed the amount realized determined without
regard to the decrease in the transferor’s share of
partnership liabilities, or
Liability of Agents
A transferee’s or transferor’s agent must provide notice to
a transferee (or other person required to withhold) if that
agent is furnished with a certification described in
Regulations 1.1446(f)-1 or 1.1446(f)-2 that the agent
knows is false. A person required to withhold may not rely
on a certification if it receives the notice described in
Regulations section 1.1446(f)-5(c)(1). An agent’s liability
is limited to the amount of compensation that the agent
derives from the transaction. In addition, an agent that
assists in the preparation of, or fails to disclose knowledge
of, a false certification may be liable for civil and criminal
penalties. For more information, see Regulations section
1.1446(f)-5.
2. The transferee is unable to determine the amount
realized because it does not have actual knowledge of the
transferor’s share of partnership liabilities (and has not
received or cannot rely on a certification of the transferor’s
share of partnership liabilities received from the transferor
(including the most recent Schedule K-1 (Form 1065)) or
a certification of the transferor’s share of liabilities
received from the partnership).
General Instructions for Section
1446(f)(4) Withholding
Certification of maximum tax liability. A transferor that
meets certain requirements can certify its maximum tax
liability to the transferee. The maximum tax liability is the
amount of the transferor’s effectively connected gain
multiplied by the applicable percentage described in
Regulations section 1.1446-3(a)(2). The applicable
percentage for foreign corporations is the highest rate of
tax under section 11(b) and for non-corporations is the
highest rate of tax under section 1. This certification may
be used if a nonrecognition provision or an income tax
treaty excludes only a portion of the effectively connected
gain. While the certification should not be submitted to the
IRS for approval, if a portion of the gain on the transfer is
not subject to tax pursuant to an income tax treaty, the
be met.
Section 1446(f)(4) generally imposes a withholding
obligation on a partnership that makes a distribution to a
transferee partner that failed to withhold the required
amount under section 1446(f)(1) when it acquired an
interest in the partnership. Withholding under section
1446(f)(4) applies to transfers of interests in partnerships,
other than publicly traded partnerships (PTPs), that occur
on or after January 1, 2023.
Who Must File
Unless an exception applies (see Exceptions to Section
1446(f)(4) Withholding, later), a partnership that makes a
distribution to a transferee partner that failed to properly
withhold under section 1446(f)(1) must complete and file
Part IV of Form 8288 to report and transmit the amount
withheld.
Instructions for Form 8288 (Rev. 01-2023)
-11-
section 1446(f)(1) is not required to withhold under
section 1446(f)(4).
Amount To Withhold
The partnership must generally withhold the entire amount
of each distribution made to the transferee partner until it
has met its withholding obligation under section 1446(f)
(4). Generally, the partnership’s withholding obligation will
be 10% of the amount realized on the transfer, plus
Withholding under Section 1446(f)(4)
Certification of withholding. A partnership must
determine the amount realized on the transfer and any
amount withheld by the transferee based on a certification
of withholding from the transferee, without regard to
whether the certification is received timely. A partnership
may not rely on the certification of withholding if it knows
or has reason to know that it is incorrect or unreliable. A
partnership that already possesses a certification of
nonforeign status (including a Form W-9) for the transferor
may instead rely on this certification to determine that it
has no withholding obligation. However, if the partnership
receives a certification of withholding that is inconsistent
with the information on the certification of nonforeign
status in its possession, the partnership is treated as
having actual knowledge, or reason to know, that the
certification of nonforeign status is incorrect or unreliable.
When To File
A partnership must file Form 8288 and transmit the tax
withheld to the IRS by the 20th day after the date of the
distribution to the transferee.
Where To File
Send Form 8288 with the amount withheld, and copy A of
Form(s) 8288-C to:
Ogden Service Center
P.O. Box 409101
Ogden, UT 84409
A partnership that does not receive or cannot rely on a
certification from the transferee must withhold under
section 1446(f)(4) until it receives a certification that it can
rely on.
Notification from the IRS. A partnership that receives
notification from the IRS that a transferee has provided
incorrect information regarding the amount realized or
amount withheld on the certification or has failed to pay
the IRS the amount reported as withheld on the
Form 8288-C Must Be Attached
A partnership should file a separate Form 8288 with Part
IV completed and only one Form 8288-C attached for
each distribution per transferee partner subject to the
withholding requirements of section 1446(f)(4). Copy A of
Form 8288-C must be attached to Form 8288. Copy B is
sent to the transferee(s). Copy C is for your records.
Transferor’s taxpayer identification number (TIN)
missing. If you do not have the transferee's TIN, you
must still file Forms 8288 and 8288-C. The IRS will send a
letter to the transferee requesting the TIN and provide
instructions for how to get a TIN.
certification must withhold the amount prescribed in the
notification on any distributions made to the transferee on
or after the date that is 15 days after it receives the
notification. The IRS will not issue a notification on the
basis that the amount realized on the certification is
incorrect if it determines that the transferee properly relied
on a certification that included the incorrect information to
compute the amount realized.
For the definitions of transfer, transferee, and
transferor, see Definitions for Section 1446(f)(1)
Withholding, earlier.
TIP
Subsequent transferees. A partnership is not required
to withhold on distributions that are made after the date on
which the transferee disposes of the transferred interest,
unless the partnership has actual knowledge that any
person that acquires the transferee's interest in the
partnership is a related person, that is, a person that bears
a relationship described in section 267(b) or 707(b)(1)
with respect to the transferee or the transferor from which
the transferee acquired the interest.
Penalties
Under section 6651, penalties apply for failure to file Form
8288 when due and for failure to pay the withholding when
due. In addition, if you are required to but do not withhold
tax under section 1446(f)(4), the tax, including interest,
may be collected from you. Under section 7202, you may
be subject to a penalty of up to $10,000 for willful failure to
collect and pay over the tax. The general partner(s) or
other responsible persons may be subject to a penalty
under section 6672 equal to the amount that should have
been withheld and paid over to the IRS.
When to withhold. A partnership must withhold on
distributions made with respect to a transferred interest
beginning on the later of:
Exceptions to Section 1446(f)(4) Withholding
The date that is 30 days after the date of transfer, or
The date that is 15 days after the date on which the
•
•
Withholding has been satisfied by transferee. A
partnership is not required to withhold under section
1446(f)(4) if it relies on a timely certification of withholding
received from the transferee that states that an exception
to withholding applies or that the transferee withheld the
full amount required to be withheld.
partnership acquires actual knowledge that the transfer
has occurred.
A partnership is treated as satisfying its withholding
obligation and may stop withholding on distributions with
respect to a transferred interest on the earlier of:
The date on which the partnership completes
•
PTP interests. A PTP is not required to withhold under
withholding and paying the amount required to be
withheld, or
section 1446(f)(4).
The date on which the partnership receives and may
•
Distributing partnerships. A partnership that is a
rely on a certification from the transferee (without regard
transferee because it made a distribution subject to
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Instructions for Form 8288 (Rev. 01-2023)
to whether such certification is timely received) that claims
Amount of withholding. A partnership required to
withhold under section 1446(f)(4) must withhold the full
amount of each distribution made with respect to the
transferred interest until it has withheld:
The buyer/transferee of a partnership interest liable for
•
section 1446(f)(1) withholding,
The partnership liable for section 1446(f)(4)
•
withholding, or
The buyer/transferee of a partnership interest making a
•
claim of refund of section 1446(f)(4) withholding.
Do not enter the name, address, or TIN of a title
company, mortgage company, etc., unless it happens to
be the actual person or entity responsible for withholding.
A tax of 10% of the amount realized (generally the
•
amount realized on the transfer determined solely under
Regulations section 1.1446(f)-2(c)(2)(i)), reduced by any
amount withheld by the transferee; plus
IRS will contact the person or entity listed on line 1
Any interest computed on the amount that should have
•
to resolve any problems that may arise
!
been withheld.
CAUTION
concerning underwithholding and/or penalties.
However, any amount of a distribution that is required
to be withheld under another withholding provision (such
as under section 1441 or 1442) is not also required to be
withheld under section 1446(f)(4).
Withholding following a notification from the IRS. A
partnership that receives notification from the IRS
(discussed earlier) must withhold the amount prescribed
in the notification on any distributions made to the
transferee on or after the date that is 15 days after it
receives the notification.
Computation of interest. The amount of interest
required to be withheld is the amount of interest that
would be required to be paid under section 6601 and
Regulations section 301.6601-1 if the amount that should
have been withheld by the transferee was considered an
underpayment of tax. Interest is payable between the date
that is 20 days after the date of the transfer and the date
on which the transferee’s withholding tax liability due
under section 1446(f)(1) is satisfied.
Name and address. If you are a fiduciary for either
section 1445(a) or 1446(f)(1) withholding, list your name
and the name of the trust or estate. Enter the home
address of an individual or the office address of an entity.
Taxpayer Identification Number (TIN). For a U.S.
individual, the TIN is a social security number (SSN). For
any person other than an individual (for example,
corporation, QIE, estate, or trust), the TIN is an employer
identification number (EIN). If you do not have an EIN, you
can apply for one. For more information on how to apply
for an EIN, go to IRS.gov/Businesses/Small-Businesses-
For a nonresident alien individual who is not eligible for
an SSN, the TIN is an IRS individual taxpayer
identification number (ITIN). For more information on the
requirements and how to apply for an ITIN, go to IRS.gov/
ITIN.
Even if the individual does not already have an ITIN, he
or she should complete Forms 8288 and 8288-A and mail
the forms along with any payment to the address shown
Buyer/Transferee Claiming Refund of Section
1446(f)(4) Withholding
Line 2. Enter the location and a description of the
property, including any substantial improvements (for
example, “12-unit apartment building”). For an interest in a
corporation that constitutes a USRPI, enter the class or
type and amount of the interest (for example, “10,000
shares Class A Preferred Stock XYZ Corporation”). For an
interest in a partnership, enter the type of partnership
interest (such as capital or preferred) transferred and, if
there are multiple classes of the same type of partnership
interest, enter the class of interest transferred. Also, enter
the percentage interest in the partnership or the number of
units in the partnership that were transferred. For
example, "40% of the Class B capital interest in the ABC
Partnership."
Line 3. Enter the date of the transfer that is subject to
withholding. If you are completing Part II and are a QIE, a
domestic trust or estate, or you make a large trust
election, enter the date of distribution. If you are
completing Part III and are a partnership that made a
distribution subject to withholding under section 1446(f)
(1), enter the date of the distribution.
A transferee may claim a refund for an excess amount if it
has been overwithheld upon under section 1446(f)(4). An
excess amount is the amount of tax and interest withheld
that exceeds the transferee's withholding tax liability plus
any interest owed by the transferee with respect to such
liability. The transferee may also be liable for any
applicable penalties or additions to tax. A transferee must
complete Part V of Form 8288 and attach Form(s) 8288-C
it received from the partnership when making a claim for
refund of section 1446(f)(4) withholding.
Specific Instructions for Form
8288
Corrected return. Check the box at the top of the page
to indicate the Form 8288 you are filing is a corrected
return.
Withholding Agent Information
Line 1. Name, address, and TIN of the withholding agent.
For purposes of Form 8288, the withholding agent is:
Line 4. If you are completing Part II and the IRS issued a
withholding certificate for this transfer under Regulations
provide the date that the withholding certificate was
issued. If a partnership is completing Part IV because it is
The buyer/transferee of a USRPI liable for section
•
1445(a) withholding,
The entity or fiduciary liable for section 1445(e)
•
withholding,
Instructions for Form 8288 (Rev. 01-2023)
-13-
withholding under section 1446(f)(4), enter the date of the
applicable distribution.
Line 11. Withholding tax liability. Enter an amount on
only one of lines 11a, 11b, 11c, or 11d.
Line 11a. Enter the amount subject to withholding
multiplied by 10% (0.10). This rate is used for any
dispositions of property prior to February 17, 2016,
subject to a 10% rate of withholding under section
1445(e).
Line 5. Enter the number of Forms 8288-A or 8288-C
attached, as applicable. If the partnership is completing
Part IV, the number of Forms 8288-C attached will always
be one. Copies A and B of each Form 8288-A should be
counted as one form.
Line 11b. Enter the amount subject to withholding
multiplied by 15% (0.15). Generally, this is the rate of
withholding for transactions required to be reported under
section 1445(e) in Part II. However, see the discussion of
various section 1445(e) transactions under Entities
Subject to Section 1445(e), earlier.
Line 11c. Enter the amount subject to withholding
multiplied by 21% (0.21) (35% (0.35) for distributions
made before January 1, 2018). See the discussion of
various section 1445(e) transactions under Entities
Subject to Section 1445(e), earlier.
Line 11d. If withholding is at a reduced rate, enter the
adjusted withholding amount, and check the box. Attach a
copy of the withholding certificate. See the discussion of
various section 1445(e) transactions under Entities
Subject to Section 1445(e), earlier.
Complete only one part of Parts I through V.
!
CAUTION
Part I—To Be Completed by the Buyer
or Other Transferee Required To
Withhold Under Section 1445(a)
Line 6. Enter the amount subject to withholding,
generally the amount realized on the transfer.
Line 7. Withholding tax liability. Enter an amount on
only one of lines 7a, 7b, or 7c.
Line 7a. Enter the amount subject to withholding
multiplied by 10% (0.10). Amounts entered on line 7a
include the following:
Line 12. Enter the amount you actually withheld.
Withholding under section 1445(a) for the purchase of a
•
residence with an amount realized of more than $300,000,
but less than or equal to $1 million. Generally, no
withholding is required for the purchase of a residence if
the amount realized is $300,000 or less. For more
earlier.
Example 2. C, a domestic corporation, distributes
property to F, a foreign shareholder whose interest in C is
a USRPI. The distribution is in redemption of C’s stock
(section 1445(e)(3) transaction). C must withhold 15% of
the fair market value of the property distributed to F. C
must complete Form 8288 and Form 8288-A.
Any dispositions of property prior to February 17, 2016,
•
Part III—To Be Completed by Buyer/
Transferee Required To Withhold
Under Section 1446(f)(1)
subject to a 10% rate of withholding under section
1445(a).
Line 7b. Enter the amount subject to withholding
multiplied by 15% (0.15). Generally, this is the rate of
withholding for transactions required to be reported under
section 1445(a) in Part I. Include withholding for the
purchase of a residence with an amount realized of more
than $1 million.
Each separate transfer subject to the
withholding requirements of section 1446(f)
!
CAUTION
(1) requires the filing of a separate Form
8288.
Line 7c. If withholding is at a reduced rate, enter the
adjusted withholding amount, and check the box. Attach a
copy of the withholding certificate. See Exceptions to
Section 1445 Withholding, earlier.
Line 13. Amount subject to withholding, generally, the
amount realized by the transferor. However, see the
Line 8. Enter the amount you actually withheld.
Line 14. Withholding tax liability. Enter an amount on
line 14a or 14b but not both.
Line 14a. Enter the amount subject to withholding
multiplied by 10% (0.10). Generally, this is the rate of
withholding for transactions required to be reported under
section 1446(f)(1) in Part III.
Line 14b. If withholding is at an adjusted amount, enter
the adjusted withholding amount, and check the box. For
circumstances when withholding is at an adjusted
amount, see discussion earlier under Determining the
Example 1. B, a corporation, purchases a USRPI from
F, a foreign person. On settlement day, the settlement
agent pays off existing loans, withholds 15% of the
amount realized by F on the sale, and disburses the
remaining amount to F. B, not the settlement agent, is the
withholding agent and must complete Form 8288 and
Form 8288-A.
Part II—To Be Completed by an Entity
Subject to the Provisions of Section
1445(e)
Line 9. If withholding is from a large trust election to
withhold upon distribution, check the box. See Large trust
Line 15. Enter the amount you actually withheld.
Line 10. Enter the amount subject to withholding.
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Instructions for Form 8288 (Rev. 01-2023)
a certification of withholding from Transferee; and entering
“$70” on line 18. Partnership must also attach Copy A of
Form 8288-C to its Form 8288 and send Copy B of Form
8288-C to the transferee. Partnership should retain Copy
C of Form 8288-C for its records.
Partnership must continue to withhold under section
1446(f)(4) on future distributions made to Transferee until
it can rely on a certification of withholding from Transferee
and it has withheld the required amount plus interest. For
each distribution, it must file a Form 8288 and complete
Part IV with the cumulative amounts related to all
distributions Partnership has made to Transferee. It must
also complete Form 8288-C with the amounts specific to
this distribution.
Part IV—To Be Completed by the
Partnership Required To Withhold
Under Section 1446(f)(4)
File a separate Form 8288 for each
distribution made to a transferee partner that
!
CAUTION
is subject to the withholding requirements of
section 1446(f)(4). Only attach the Form 8288-C
applicable to the current distribution.
Line 16. Line 16 is used to report the cumulative number
and amounts related to this distribution plus any prior
distributions that you have made to a transferee that failed
to properly withhold with respect to a transfer under
section 1446(f)(1). These distributions are subject to
withholding under section 1446(f)(4) and Regulations
section 1.1446(f)-3.
Line 16a. Enter the total number of distributions,
including this one, made to the transferee. This amount
should equal the total number of Forms 8288-C that you
filed, including this one, for the transferee with respect to
the transfer.
Line 16b. Enter the total amount of distributions,
including this one, made to the transferee. This amount
should equal the total of the amounts in box 5 of the
Form(s) 8288-C you have filed, including this one, for the
transferee with respect to the transfer.
Line 16c. If any portion of a distribution, including this
one, was subject to withholding under another provision of
the Internal Revenue Code (such as section 1441 or
1442), enter the total amount of other withholding on
these distributions. This amount should equal the total of
the amount(s) in box 6 of the Form(s) 8288-C you have
filed, including this one, for the transferee with respect to
the transfer.
Line 17. If known, enter the total amount of the
transferee’s liability under section 1446(f)(1), without
regard to any withholding you performed under section
1446(f)(4). Generally, this amount will be 10% of the
amount realized on the transfer.
Line 18. Enter the total amount of section 1446(f)(4) tax
that you have withheld on the transferee with respect to
this transfer. This should equal the total of the amounts in
box 5 of the Form(s) 8288-C you have filed, including this
one, for the transferee with respect to the transfer.
Example 3. On a transfer of an interest in Partnership,
Transferee had a section 1446(f)(1) withholding obligation
of $110, but failed to withhold any tax on the transfer or to
provide a certification of withholding to Partnership.
Partnership has actual knowledge of the transfer at the
time that it occurred. For its first distribution following the
date on which it is required to withhold under section
1446(f)(4), Partnership distributes $100 of income
Part V—To Be Completed by Buyer/
Transferee Claiming a Refund of
Withholding Under Section 1446(f)(4)
The IRS can process your refund claim only if
you either (a) previously filed Form 8288 with
!
CAUTION
Part III completed under section 1446(f)(1) or
(b) file this Form 8288 with both Parts III and V
completed. If you are filing under the latter case,
because you have not withheld any amounts under
section 1446(f)(1), do not attach a Form 8288-A.
Line 19. Enter the amount that was subject to withholding
under section 1446(f)(1) on the transfer, generally the
amount realized by the transferor.
Line 20. Enter the total of the amount(s) that the
partnership has withheld under section 1446(f)(4) (attach
a copy of Copy B of Form(s) 8288-C).
Line 21. Withholding tax liability. Enter the amount you
were required to withhold under section 1446(f)(1) on
either line 21a or 21b (but not both). Do not reduce this
line by:
Amounts you withheld on the transfer as reflected on
•
Form(s) 8288-A,
An amount of tax you paid pursuant to an IRS Notice, or
Tax that the transferor has paid for which you have
•
•
obtained proof, such as on Form 4669.
Instead, attach copies of these documents to Form
8288 along with any other information relevant to
determining your outstanding withholding tax liability.
Line 21a. Enter the amount subject to withholding
multiplied by 10% (0.10). Generally, this is the rate of
withholding for transactions required to be reported under
section 1446(f)(1) in Part III.
Line 21b. If withholding is at a reduced rate, enter the
adjusted withholding amount, and check the box. See the
instructions for line 14b, earlier, for circumstances when
withholding is at an adjusted amount.
Line 22. Enter the excess of line 20 over line 21a or 21b.
Note that you are also liable for interest on any
withholding tax liability reported on line 21. The IRS will
compute that amount and reduce your claimed excess
amount accordingly. You may also be liable for any
penalties or additions to tax.
described in section 871(a) to Transferee. Partnership is
required to withhold $30 under section 1441 on the $100
distribution. Partnership must withhold the remaining $70
($100 - $30) from the distribution under section 1446(f)(4).
Transferee receives net $0 on the distribution. Partnership
must file a Form 8288 and complete Part IV by entering
“1” on line 16a; entering “$100” on line 16b; entering “$30”
on line 16c; leaving line 17 blank since it has not received
Instructions for Form 8288 (Rev. 01-2023)
-15-
enforcement and intelligence agencies to combat
terrorism.
Paid Preparer
Generally, anyone you pay to prepare Form 8288 must
sign it and include their Preparer Tax Identification
Number (PTIN) in the space provided.
You are not required to provide the information
requested on a form that is subject to the Paperwork
Reduction Act unless the form displays a valid OMB
control number. Books or records relating to a form or its
instructions must be retained as long as their contents
may become material in the administration of any Internal
Revenue law. Generally, tax returns and return
Privacy Act and Paperwork Reduction Act Notice.
We ask for the information on this form to carry out the
Internal Revenue laws of the United States. Section 1445
generally imposes a withholding obligation on the
withholding agent (the buyer or other transferee) when a
USRPI is acquired from a foreign person. Section 1445
also imposes a withholding obligation on certain foreign
and domestic corporations, QIEs, and the fiduciaries of
certain trusts and estates. Section 1446(f)(1) generally
imposes a withholding obligation on the withholding agent
(the buyer or other transferee, including a partnership that
makes a distribution resulting in gain under section 731)
when an interest in a partnership is acquired from a
foreign person (transferor) that results in gain any portion
of which would be treated under section 864(c)(8) as
effectively connected with the conduct of a trade or
business within the United States. Section 1446(f)(4)
generally imposes a withholding obligation on a
information are confidential, as required by section 6103.
The time needed to complete and file these forms will
vary depending on individual circumstances. The
estimated burden for business taxpayers filing this form is
approved under OMB control number 1545-0123. The
estimated burden for all other taxpayers who file these
forms is shown next.
Form 8288
Form 8288-A Form 8288-C
Record
keeping
.
.
.
.
9hrs., 5 min.
3 hrs., 6 min.
35 min.
2hrs., 52 min.
24 min.
Learning about
the law or the
partnership if a transferee fails to withhold any amount
required to be withheld under section 1446(f)(1).This form
is used to report and transmit the amount withheld.
form
.
.
.
.
.
.
.
5 hrs., 13 min.
6 hrs., 48 min.
Preparing and
sending the
form to the
You are required to provide this information. Section
6109 requires you to provide your taxpayer identification
number. We need this information to ensure that you are
complying with the Internal Revenue laws and to allow us
to figure and collect the right amount of tax. Failure to
provide this information in a timely manner, or providing
false information, may subject you to penalties. Routine
uses of this information include giving it to the Department
of Justice for civil and criminal litigation, and to cities,
states, the District of Columbia, and U.S. commonwealths
and possessions for administration of their tax laws. We
may also disclose this information to other countries under
a tax treaty, to federal and state agencies to enforce
federal nontax criminal laws, or to federal law
IRS
.
.
.
.
.
.
.
40 min.
27 min.
If you have comments concerning the accuracy of
these time estimates or suggestions for making these
forms simpler, we would be happy to hear from you. You
you can write to the Internal Revenue Service, Tax Forms
and Publications, 1111 Constitution Ave. NW, IR-6526,
Washington, DC 20224. Do not send the form to this
-16-
Instructions for Form 8288 (Rev. 01-2023)