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Form 8288-B for Maryland: What You Should Know
In this post I show you how to complete Form 8288, which is the IRS form you need if you want the taxes on your foreign real estate transactions paid, whether you are a nonresident or a resident. This is the perfect time to invest in a FAST, simple, free and effective process. It is called the “Nonresident Land Use Transfer (LTU”) Act” or the “US-Real Property Exchanges and Withholding Act.” The law, approved by Congress in June 1993, became effective on January 1, 2000. Its primary purpose is to eliminate income-tax evasion as a source of wealth. It also allows foreign persons to transfer (within the United States) US-real Property interests they already own. Why are these tax forms required? Because there is a lot to know about the form. Why do I need a 940 form? The 940 is used to collect the taxes you will be paying on the sale of your home. You cannot get an extension of time to file unless you get a 940 first. What is an 8288 form? The form with its three sections is required when property is sold abroad, regardless of whether the sale is made within the United States. What does “foreign person” mean? The term “foreign person” means an individual who is a tax resident of a foreign country and who has not been a resident of the United States for at least 12 months immediately preceding the date of sale. Also, an individual who is a trust, estate or other legal entity whose beneficiaries are not United States persons in a foreign country or whose beneficiaries are United States aliens or United States citizens can be deemed to be a foreign person. If my property is sold to a foreign person and the person is a tax resident of a foreign country (i.e., in the USA) can't I still make an 8289 exchange? Yes. Because the 941 is used as a placeholder, you can exchange the 8288 if you want to make an exchange as well. What is the basis of my property? The basis of property is your legal title in the property (as it is shown on the record and is not based on the cost of the property to you). In the case of a sale of property to a foreign person, the tax law requires that the basis of the property be equal to 30 percent of the fair market value.
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How to complete a Form 8288-B for Maryland?
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