How Do I Get a Refund of FIRPTA Withholding After Selling U.S. Property?
To get a refund of FIRPTA withholding, file Form 1040-NR for the year you sold the property, report the actual capital gain, and claim the 15% withholding as a tax payment on line 25d. Because FIRPTA (Foreign Investment in Real Property Tax Act) requires the buyer to withhold 15% of the gross sale price via Form 8288, the amount withheld almost always exceeds your actual tax liability on the net gain. The IRS refunds the difference after processing your return.
The FIRPTA refund process step by step:
| Step | Action | Form |
| 1 | Buyer withholds 15% of gross price at closing | Form 8288 / 8288-A |
| 2 | You receive Copy B of Form 8288-A showing the amount withheld | Retain for your records |
| 3 | File a U.S. tax return for the sale year | Form 1040-NR |
| 4 | Report the sale on Schedule D / Form 8949 | Capital gain calculation |
| 5 | Claim the FIRPTA withholding as a tax payment | Form 1040-NR, line 25d |
| 6 | IRS processes the return and issues a refund | Direct deposit or check |
Why you almost always get a refund:
- 15% is withheld on the gross sale price, not on the gain
- Your actual tax is on the net gain (sale price minus basis minus selling costs), taxed at capital gains rates (typically 15% or 20% of the gain)
- Example: Sell for $500,000 with a $400,000 basis. FIRPTA withheld: $75,000. Actual tax on $100,000 gain at 15%: $15,000. Refund: $60,000
Timeline and tips:
- File Form 1040-NR as early as possible after year-end; refunds typically take 6 to 12 months
- ITIN required: If you do not have a Social Security number, apply for an Individual Taxpayer Identification Number (Form W-7) and attach it to your 1040-NR
- Withholding certificate (Form 8288-B): To reduce withholding at closing, you can apply before the sale, but processing takes 90+ days
- State withholding: Many states (California, Hawaii, Maryland, others) impose separate state-level withholding on foreign sellers, also refundable via a state nonresident return
For help with FIRPTA and NRA filing, see our Form 8288 Guide.
Last updated on April 29, 2026
