November 2021 Newsblog

November, 2021 NewsBlog

Nov 3, 2021

Halloween is done! We’re suddenly at the end that it felt like I jumped through a space-time wormhole. As a reminder, from today’s date:

Thanksgiving is 21 days

Christmas is 51 days

New Years is 59 days

Just saying, because you know you will need to pre-order all the Christmas gifts that are going to be shipped “delayed” due to the worldwide shipping and national trucking issues we are facing.

Do you remember Memorial Day? What happened on the 4th of July? How about Labor Day? I think I blinked and missed them. 

(Real questions emailed/called in to us)

Here are two Questions and look, they are both about WITHHOLDINGS! 


I saw your article online about FIRPTA which is great. I have a question for you. I’m a nonresident in immigration status, but I qualify for a substantial presence test as a resident for tax purposes. My escrow made a mistake on my residence status. They are using nonresident status for me and withholding a lot of tax from me according to the FIRPTA rule. I do not know how to claim all of the withholding, because substantial presence residence should get a $250,000 exclusion for the main home sale.


Let me make a comment on your last statement about the $250,000 exclusion first. That exclusion applies when you file your income taxes at the end of the year and $250,000 is excluded from your gain. It does not have anything to do with the actual, physical withholding and remitting of FIRPTA required funds.

As to your original question, unfortunately, once the tax withholding has been sent to the IRS the only way you can get it back is by filing your income tax return and show on the return that you prepaid a certain amount, evidenced by the 8288-B that should be returned to you.

Educational Moment:

Here’s my main question: How do we, as the escrow/settlement agent, verify that sentence –  “qualify for a substantial presence test as a resident for tax purposes”? We can’t, as we are not the residence status police or the ITIN police. 

If you were my client and completed the FIRPTA form and provided me with your tax ID # then I would not have made the withholding. By signing the form you are taking responsibility, under penalty of perjury, that what is on that form is true and correct and you will be held accountable for any issues in the future. 

If you had a tax ID #  that starts with a “9”, which is indicative of a foreigner, I would need to question your foreigner status. If your response was that you can establish a “substantial presence residence” test, then I would rely on your willingness to put your money where your signature is and sign the FIRPTA form. 



I have a client who just passed away and he has a living trust. His son wants me to sell the property. Do you know if he will have the California withholding of 3.33 percent?  The son lives out of state.  Also will the son use his social security number on the firpta form? 


If the original Trustee of the Trust owned the property as his principal residence, then whoever is the Successor Trustee would claim that the property was the original Trustee’s principal residence and there would be no California 3.33% withholding. If it was not the principal residence then the 3.33% would apply, unless he can avail himself of one of the other exemptions.  It is all about the original Trustee, not the Successor Trustee. So whether the son, if he is the Successor Trustee, is living out of state does not matter. What matters is how the property was classified with the original Trustee.

As to which social security number to use, once the last original Trustee has passed away the Successor Trustee must immediately apply for a new Tax ID # with the IRS specifically for the Trust. He would not use either his father’s SS # nor would he use his own.

Educational Moment: 

This is a case of – It is not all about you! If all the original Trustees passed away and you are now the Successor Trustee, the first thing you will do is get a separate Tax ID number for the Trust. From then on you will use that ID to handle all of the Trust business, not the original Trustee’s social security number, nor your own social security number. And whenever there are questions regarding the Trust, it will be about the Trust and the original Trustee, and it will not be about you!

~ Cute Funny of the Month ~ 

When ya hafta go back to work…

~ Quote of the Month ~ 
Money can’t buy you happiness, but it will certainly get you
 a better class of memories.

~ Ronald Reagan ~ 


Trials, Tribulations and Drama of handling Bulk Sales During the PandemicStories that can make your hair rise around spooky Halloween days  

You Have Questions? We Have Answers!


“Escrow is my FOREMOST language!”

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