The Foreign Investments in Real Property Tax Act, 26 U.S.C. § 1445, better known as “FIRPTA,” is a federal tax law that was created in 1980 out of concern that American farmland was being purchased in significant quantities by foreign entities and foreign individuals while those same individuals were enjoying total exemptions from taxes on sale of real estate. FIRPTA was built on concerns that we were incentivizing foreign use of American land as investment property through omission of capital gains taxation on those foreign dispositions. FIRPTA asks that the Buyer [or a qualified substitute], withhold part of the money from a sale of real estate to a foreign person or foreign entity, unless the Seller is exempt from FIRPTA. The Seller has a few ways to claim exemption, such as swearing under penalty of perjury [through an affidavit] that they are not a foreign person under 26 U.S.C. § 1445(f)(3), swearing that they are an exempt domestic corporation under 26 U.S.C. § 1445(b)(3), or swearing that they are exempt under other reasons stated in 26 U.S.C. § 1445(b). If the Seller is not exempt, the Buyer is to withhold [send the money over to the Department of the Treasury] a certain amount of money. If the property sells for less than $300,000, the Seller can be exempt. If the property sells for $300,000-$1,000,000, 10% is withheld. If the property sells for more than $1,000,000, 15% is withheld. Ultimately, if the Buyer withholds too much, the Seller can contact the Secretary of the Treasury and dispute the tax liability, receiving a refund if successful.