ForCo, a foreign corporation not engaged in a U.S. trade or business, recognizes a $3 million gain from the sale of land located in the United States. The amount realized on the sale was $50 million. Absent any exceptions, what is the required withholding amount on the part of the purchaser of this land?

Question

Quizplus · Accepted Answer

The required withholding amount on the part of the purchaser of the land is 10% of the amount realized on the sale, which is $50 million. Therefore, the correct withholding amount is $5 million (10% of $50 million). This is in accordance with FIRPTA (Foreign Investment in Real Property Tax Act) regulations.

ForCo, a Foreign Corporation Not Engaged in a U