Form 8288 (Rev. 6-90)

Page 4

Liability of Agents

if the transferee or other withholding agent
has received (1) a transferor's certification
of nonforeign status, or (2) a corporation’s
statement that an interest is not a U.S. real
property interest, and the transferee’s or
transferor’s agent knows that such
document in (1) or (2) is false, the agent is
required to provide notice to the transferee,
entity, or fiduciary. If the notice is not
provided, the agent will be liable for the tax
that should have been withheld, but only to
the extent of the agent’s compensation
from the transaction.

If you are the withholding agent, and you
receive such a notice of false certification
or statement from your agent or the
transferor's agent, you must withhold tax as
if you had not received a notice of
nonforeign status. But see Belated notice of
false certification, on page 3.

The terms transferor's agent and
transferee's agent mean any person who
represents the transferor or transferee,
respectively, in any negotiation with another
person (or another person’s agent) relating
to the transaction, or in settling the
transaction. For purposes of section
1445(e), a transferor's or transferee's
agent is any person who represents or
advises an entity, a holder of an interest in
such entity, or a fiduciary with respect to
the planning, arrangement, or
consummation of a transaction described in
sections 1445(e)(1) through (4).

A person is not treated as an agent if the
person only performs one or more of the
following acts in connection with the
transaction:

(1) The receipt and disbursement of any
part of the consideration.

(2) The recording of any document.

(3) Typing, copying, and other clerical
tasks.

(4) The obtaining of the title insurance
reports and reports concerning the
condition of the property.

(5) The transmission of documents
between the parties.

(6) Functions exclusively in his or her
capacity as a representative of a
condominium association or cooperative
housing corporation. This exemption
includes the board of directors, the
committee, or other governing body.

Corporations, Partnerships, Trusts,
and Estates Subject to Section
1445(e)
Withholding is required on certain
distributions and other transactions by
domestic or foreign corporations,
partnerships, trusts, and estates. A domestic
trust or estate must withhold 34% of the
amount distributed to a foreign beneficiary
from a “U.S. real property interest account,”
which it is required to establish under
Regulations section 1.1445-5(c)(1)(iii). A
foreign corporation that has not made the
election under section 897(i) must withhold
34% of the gain it recognizes on the
distribution of a U.S. real property interest to
its shareholders. Certain domestic
corporations are required to withhold tax on
distributions to foreign shareholders.

No withholding is required under section
1445(e) on the transfer of an interest ina
domestic corporation if any class of stock of

the corporation is regularly traded on an
established securities market. Similarly, no
withholding is required on the transfer of an
interest in a publicly traded partnership

or trust.

No withholding will be required with
respect to an interest holder if the entity or
fiduciary receives a certification of
nonforeign status from the interest holder.
An entity or fiduciary may also use other
means to determine that an interest holder
is not a foreign person; but, if it does so, and
it is later determined that the interest holder
is a foreign person, the withholding may be
collected from the entity or fiduciary.

Section 1445(e)(1) Transactions

Partnerships. —A domestic partnership
that is not publicly traded must withhold tax
under section 1446 on effectively
connected income of its foreign partners
and file Form 8804, Annual Return for
Partnership Withholding Tax (Section
1446), and Form 8805, Foreign Partner's
Information Statement of Section 1446
Withholding Tax. A publicly traded
partnership generally must withhold tax
under section 1446 on distributions to its
foreign partners and file Forms 1042 and
1042S. Because a domestic partnership
that disposes of a U.S. real property interest
is required to withhold under section 1446,
a domestic partnership is not also required
to withhold under section 1445(e)(1).

Trusts and estates. —lf a domestic trust
(that does not make the large trust election,
explained below, or that is not a REIT or is
not publicly traded) or estate disposes of a
U.S. real property interest, the amount of
gain realized is entered into a separate
“U.S. real property interest account.” The
fiduciary must withhold 34% of the amount
distributed from such account during the
tax year of the trust or estate in which the
disposition occurred to a foreign person and
pay over such withholding to IRS within 20
days of the date of distribution. Special
rules apply to grantor trusts. For
information about how to compute the
amount subject to withholding and other
special rules and exceptions, see
Regulations section 1.1445-5.

Large trust election.—Trusts with more
than 100 beneficiaries may make the large
trust election to withhold upon distribution
rather than at the time of transfer. The
amount to be withheld from each
distribution is 34% of the amount
attributable to the foreign beneficiary's
proportionate share of the current balance
of the trust’s section 1445(e)(1) account.
This election does not apply to any real
estate investment trust or to any publicly
traded trust. Special rules apply to large
trusts that make recurring sales of growing
crops and timber.

Atrust's section 1445(e)(1) account is
(1) the total net gain realized by the trust on
all section 1445(e)(1) transactions after the
date of the election, minus (2) the total of
all distributions made by the trust after the
date of the election from such total net
gain. For more information about the large
trust election, see Regulations section
1.1445-5(c)(3).

Section 1445(e)(2) Transactions.—A
foreign corporation that distributes a U.S.
real property interest must generally
withhold 34% of the gain recognized by the

corporation. No withholding or reduced
withholding is required if the corporation
receives a withholding certificate from IRS.
Section 1445(e)(3) Transactions.—
Generally, a domestic corporation that
distributes any property to a foreign person
that holds an interest in the corporation
must withhold 10% of the fair market value
of the property distributed if:

(1) The foreign person’s interest in the
corporation is a U.S. real property interest
under section 897, and

(2) The property is distributed either in
redemption of stock under section 302 or in
liquidation of the corporation under
sections 331 through 341.

No withholding or reduced withholding is
required if the corporation receives a
withholding certificate from IRS.

Section 1445(e)(4) Transactions.—No
withholding is required under section
1445(e)(4), relating to certain taxable
distributions by domestic or foreign
partnerships, trusts, and estates, until the
effective date of a Treasury Decision under
section 897(e)(2)(B)(ii) and (g).

Section 1445(e)(5) Transactions.—
Under section 1445(e)(5), the transferee of
a partnership interest must withhold 10% of
the amount realized on the disposition by a
foreign partner of an interest in a domestic
or foreign partnership in which at least 50%
of the value of the gross assets consist of
U.S. real property interests and at least
90% of the value of the gross assets consist
of U.S. real property interests plus any cash
or cash equivalents. However, no
withholding is required under section
1445(e)(5) for dispositions of interests in
other partnerships, trusts, or estates until
the effective date of a Treasury Decision
under section 897(g). In addition, no
withholding is required if, no earlier than 30
days before the transfer, the transferee
receives a statement signed by a general
partner under penalties of perjury that at
least 50% of the value of the gross assets of
the partnership does not consist of U.S. real
property interests or that at least 90% of
the value of the gross assets does not
consist of U.S. real property interests plus
cash or cash equivalents. The transferee
may rely on the statement unless the
transferee knows it is false or the transferee
receives a false statement notice pursuant
to Regulations section 1.1445-4.

Specific Instructions

Lines 1.—If you are a fiduciary, list your
name and the name of the trust or estate.
Enter the home address of an individual or
the office address of an entity.

Lines 2.—Enter a description of the
property including its location and the
nature of any substantial improvements,
such as an apartment building or
warehouse, or the class or type and amount
of interests in the case of interests ina
corporation that constitute U.S. real
property interests, such as ‘10,000 shares
Class A Preferred Stock XYZ Corporation.”
Line 3, Part Il.—If you are a domestic trust
or estate (but not a grantor trust) or you
make the large trust election, enter the
date of distribution.

Lines 4.—Copies A and B of each Form
8288-A should be counted as one single
form.


8288 U.S. Withholding Tax Return for
fen Jone 1850) Dispositions by Foreign Persons of OMB No. 1545-0902
Department ofthe Treasury U.S. Real Property Interests Expires 5-31-93

Internal Revenue Service

Complete Part | or Part II. Also complete and attach Copies A and B of Form(s) 8288-A.
(Attach additional same size sheets if you need more space.)

GRE) To Be Completed by the Buyer or Other Transferee Required To Withhold

1 Name of withholding agent (buyer or other transferee) Identification number

Address (number and street)

City, state, and ZIP code

2__ Description and location of property acquired

3 Date of transfer 4 Number of Forms 8288-A attached 5 Amount realized on the transfer

6a Withholdingisat10%® =... ... ee ee LI ; 7 Amount withheld
b Withholding is of a reduced amount _ Ey Check applicable box.

To Be Completed by a Corporation, Partnership, Trust, or Estate Subject to the Provisions of Section 1445(e)

1 Name of withholding agent (corporation, partnership, or fiduciary) Identification number

Address (number and street)

City, state, and ZIP code

2 _Description of U.S. real property interest transferred or distributed

3 Date of transfer 4 Number of Forms 8288-A attached
5a Withholdingisat10%0r34%  ..........~.0 6 Total amount withheld
b Withholding is of a reduced amount - s 4 4 4 4. .E] Checkall applicable boxes.
¢ Large trust election to withhold at distribution
‘Under penalties of perjury, | declare that | have examined this return and accompanying attachments, and, to the best of my knowledge and belief, they are true,
PI correct, and complete. Declaration of preparer (other than withholding agent, partner, fiduciary, or corporate officer) is based on all information of which
lease preparer has any knowledge.
Sign
Here >
Signature of withholding agent, partner, fiduciary, or corporate officer Title (if applicable) Date
Date Preparer's social security no.
Paid Preparer's » Check if g . .
re |_ Signature -
Preparer’ S eee a self-employed >
Use Only | yours if self-employed) » EL No.
and address ZIP code >

For Paperwork Reduction Act Notice, see instructions. Form 8288 (Rev. 6-90)


Form 8288 (Rev. 6-90)

Page 2

General Instructions
(Section references are to the Internal
Revenue Code, unless otherwise noted.)
Paperwork Reduction Act Notice.—We
ask for this information to carry out the
Internal Revenue laws of the United States.
We need it to ensure that taxpayers are
complying with these laws and to allow us to
figure and collect the right amount of tax.
You are required to give us this information.

The time needed to complete and file
these forms will vary depending on
individual circumstances. The estimated
average times are:

Form 8288 Form 8288-A

Recordkeeping . 5 hrs., 30 min. 2 hrs., 52 min.
Learning about

the law or
theform. . .4hrs.,28min. 12min.
Preparing and

sending the

formtoIRS . .4hrs.,46min. 15min

If you have comments concerning the
accuracy of these time estimates or
suggestions for making these forms more
simple, we would be happy to hear from
you. You can write to both the Internal
Revenue Service, Washington, DC 20224,
Attention: IRS Reports Clearance Officer,
T:FP; and the Office of Management and
Budget, Paperwork Reduction Project
(1545-0902), Washington, DC 20503.

Purpose of Form

A 10% withholding obligation is generally
imposed on the buyer or other transferee
(withholding agent) when a U.S. real
property interest is acquired from a foreign
person. The withholding obligation (at 34%
or 10%) also applies to certain partnerships,
foreign and domestic corporations, and the
fiduciary of certain trusts and estates. This
withholding serves to collect tax that may be
owed by the foreign person. Use this form to
report and transmit the amount withheld.
Note: You are not required to withhold if
any of the exceptions listed on page 3 apply.

Amount To Withhold

Generally, you must withhold 10% of the
amount realized on the disposition by the
transferor. See Amount realized under
Definitions, later. However, see
Corporations, Partnerships, Trusts, and
Estates Subject to Section 1445(e), on page
4, for information about when withholding
at 34% is required. Also see Withholding
Certificate Issued by IRS, on page 3, for
information about applying for reduction or
elimination of withholding.

Joint Transferors.—If one or more foreign
persons and one or more U.S. persons jointly
transfer a U.S. real property interest, first,
determine the amount subject to withholding
by allocating the amount realized from the
transfer among the transferors based on
their capital contribution to the property. For
this purpose, a husband and wife are treated
as having contributed 50% each. Second,
withhold on the total amount allocated to
foreign transferors. Third, credit the amount
withheld among the foreign transferors as
they mutually agree. The transferors must
request that the withholding be credited as
agreed upon by the 10th day after the date
of transfer. If no agreement is reached,
credit the withholding by evenly dividing it
among the foreign transferors.

Who Must File

A buyer or other transferee of a U.S. real
property interest, and a corporation,
partnership, or fiduciary that is required to
withhold tax must file Form 8288 to report
and transmit the amount withheld. If two or
more persons are joint transferees, each of
them is obligated to withhold. However, the
obligation of each will be met if one of the
joint transferees withholds and transmits
the required amount to IRS.

Publicly Traded Partnerships, Publicly
Traded Trusts, and REITs.—Distributions
from any publicly traded partnership are
generally subject to the withholding
requirements of section 1446 and are not
subject to the withholding requirements of
section 1445. See Rev. Proc. 89-31, 1989-
1C.B. 895. Distributions from a trust that is
regularly traded on an established securities
market and distributions from a real estate
investment trust (REIT) are subject to
section 1445 and its regulations. However,
for such partnerships and trusts, generally
the method of paying over and reporting the
withholding to IRS is governed by section
1461 and its regulations and the deposit
rules contained in Regulations section
1.6302-2. Use Form 1042, Annual
Withholding Tax Return for U.S. Source
Income of Foreign Persons, and Form
1042S, Foreign Person's U.S. Source
Income Subject to Withholding, to report
and pay over the withheld amounts. Do
NOT file Forms 8288 and 8288-A for these
distributions. See Temporary Regulations
section 1.1445-8T.

When To File

Atransferee must report and transmit to
IRS the tax withheld by the 20th day after
the date of transfer. Timely mailing of
Forms 8288 and 8288-A by U.S. mail will
be treated as timely filing.

Even if, on the date of transfer, an
application for a withholding certificate
(explained later) is or has been submitted to
IRS, you must still withhold. However, do not
file Form 8288 and transmit the withholding
until the 20th day after the day IRS mails a
copy of the withholding certificate or notice
of denial. But if the principal purpose for
filing the application for a withholding
certificate was to delay your payment to the
IRS of the amount withheld, interest and
penalties will apply to the period after the
20th day after the date of transfer.
Installment Payments. —You must
withhold the full amount at the time of the
first installment payment. If you cannot
because the payment does not involve
sufficient cash or other liquid assets, you
may obtain a withholding certificate
from IRS.

Where To File

File Form 8288, with the amount withheld,
and Copies A and B of Form(s) 8288-A with
the FIRPTA Unit, Internal Revenue Service,
Philadelphia, PA 19255.

Forms 8288-A Must Be Attached
Anyone who completes Form 8288 must
also complete a Form 8288-A, Statement
of Withholding on Dispositions by Foreign
Persons of U.S. Real Property Interests, for
each person subject to withholding. Copies
Aand B must be attached to Form 8288.
Copy C is for your records.

After receipt of Form 8288 and Form(s)
8288-A, IRS will stamp Copy B of Form
8288-A to show receipt of the withholding
and forward the stamped copy to the foreign
person subject to withholding at the address
shown on Form 8288-A. The receipted Copy
B of Form 8288-A is for the transferor’s use
in filing future income tax returns or making
future claims. You are not required to furnish
a copy of Form 8288 or 8288-A directly to
the transferor, To receive credit for the
withheld amount, generally the transferor
must attach the stamped Copy B of Form
8288-A to any U.S. income tax return (e.g.,
Form 1040NR or 1120F) or application for
refund the transferor files with IRS.

Penalties

Under section 6651, penalties apply for
failure to file Form 8288 when due and for
failure to pay the withholding when due. In
addition, if you are required but fail to
withhold tax under section 1445, the tax
may be collected from you. Further, under
section 7202 you may be subject toa
penalty of up to $10,000 for willful failure
to collect and pay over the tax. Corporate
officers or other responsible persons may be
subject to a penalty under section 6672
equal to the amount that should have been
withheld and paid over to IRS.
Definitions

Transferee means any person, foreign or
domestic, that acquires a U.S. real property
interest by purchase, exchange, gift, or any
other disposition.

Transferor, for purposes of this
withholding, means any foreign person that
disposes of a U.S. real property interest by
sale, exchange, gift, or any other disposition.

U.S. real property interest means any
interest, other than an interest solely as a
creditor, in:

(1) Real property located in the U.S. or
the Virgin Islands,

(2) Certain personal property associated
with the use of real property, or

(3) A domestic corporation unless it is
shown that the corporation was not a U.S.
real property holding corporation during the
previous 5 years (or during the period in
which the transferor held the interest, if
shorter).

AUS. real property interest does not
include:

(1) An interest in a domestically
controlled real estate investment trust
(REIT).

(2) An interest in a corporation that has
disposed of all its U.S. real property
interests in transactions in which the full
amount of any gain was recognized as
provided in section 897(c)(1)(B).

(3) An interest in certain publicly traded
corporations, partnerships, and trusts.

For further information on these rules,
see Regulations sections 1.897-1 and -2.
Also see, Transferred Property Not a U.S.
Real Property Interest under Exceptions, on
page 3.

Amount realized means the sum of the
cash paid, or to be paid (not including
interest or original issue discount), the fair
market value of other property transferred
or to be transferred, and the amount of any
liability assumed by the transferee or to
which the U.S. real property interest is


Form 8288 (Rev. 6-90)

Page 3

subject immediately before and after the
transfer. Generally, the amount realized, for
purposes of this withholding, is the sales or
contract price.

Date of transfer means the first date on
which consideration is paid or a liability is
assumed by the transferee. However, for
purposes of sections 1445(e)(2), (3), and
(4), and Regulations sections 1.1445-
5(c)(1)iii) and 1.1445-5(c)(3), the date of
transfer is the date of distribution that gives
rise to the obligation to withhold. Payment of
consideration does not include the payment,
before the passage of legal or equitable title
(other than pursuant to an initial purchase
contract), of earnest money, a good-faith
deposit, or any similar sum primarily
intended to bind the parties to the contract
and subject to forfeiture. However, a
payment that is not forfeitable may
nevertheless be found to constitute earnest

money, a good-faith deposit, ora similar sum.

A foreign person is a nonresident alien
individual, foreign corporation that has not
made an election under section 897(i) to be
treated as a domestic corporation, foreign
partnership, foreign trust, or foreign estate.
It does not include a resident alien
individual.

An individual's identification number is
the social security number. For any other
person, it is the U.S. employer identification
number.

Exceptions
You are not required to withhold if any of
the following applies:

(1) You acquire the property for use as a
residence and the amount realized (sales
price) is not more than $300,000.

(2) The transferor (seller) is not a foreign
person.

(3) You did not acquire a U.S. real
property interest.

(4) You receive a notice of nonrecognition
of gain or loss from the transferor, and you
file a copy of the notice with the IRS.

(5) You receive a withholding certificate
from IRS that excuses withholding. (See
Withholding Certificate Issued by IRS,
below.)

(6) The amount realized by the transferor
is zero. For example, the property is
transferred as a gift and the recipient does
not assume any liabilities or furnish any
other consideration to the transferor.

(7) The property is acquired by the U.S.,a
U.S. state or possession, a political
subdivision thereof, or the District of
Columbia

(8) An amount is realized by the grantor
on the grant or lapse of an option to acquire
aU.S. real property interest. However,
withholding is required on the sale,
exchange, or exercise of such option.

For rules applicable to foreclosures, see
Regulations section 1.1445-2(d)(3).
Purchase of Residence for $300,000 or
Less.—No withholding is required if an
individual or individuals acquire U.S. real
property for use as a residence and the
amount realized is not more than
$300,000. A U.S. real property interest is
acquired for use as a residence if you ora
member of your family has definite plans to
reside at the property for at least 50% of
the number of days the property is used by
any person during each of the first two 12-

month periods following the date of
transfer. Do not take into account the
number of days the property will be vacant
in making this determination. No form or
other document need be filed with IRS for
this exception; however, if you do not in fact
use the property as a residence, the
withholding tax may be collected from you.

This exception does not apply if the
actual transferee is not an individual, even
if the property is acquired for an individual.
However, this exception does apply whether
or not the transferor is an individual,
partnership, trust, corporation, or other
transferor.

Transferor Not a Foreign Person.—You
need not withhold if you receive a
certification of nonforeign status from the
transferor, signed under penalties of perjury,
stating that the transferor is not a foreign
person and containing the transferor’s
name, address, and identification number. If
you receive a certification, the withholding
tax cannot be collected from you, unless you
knew that the certification was false or you
received a notice from your agent or the
transferor’s agent that it was false. The
certification must be signed by the
individual, a responsible officer of a
corporation, a general partner of a
partnership, or the trustee, executor, or
equivalent fiduciary of a trust or estate. Any
foreign corporation electing to be treated as
a domestic corporation must attach to the
certification a copy of the acknowledgment
of the election received from IRS, and such
acknowledgment must state that the
information required by Regulations section
1,897-3 has been determined to be
complete. If the acknowledgment is not
attached, you may not rely on the
certification. If you receive a certification of
nonforeign status, keep it in your records for
5 years after the year of transfer.

You may also use other means to
determine that the transferor is nota
foreign person; but, if you do, and itis later
determined that the transferor is a foreign
person, the withholding tax may be
collected from you.

Belated notice of false certification. —
If after the date of transfer you receive a
notice from your agent or the transferor's
agent that the certification of nonforeign
status you received is false, you can rely on
the certification and not withhold on
consideration paid before you received the
notice. However, you must withhold the full
10% of the amount realized from any
consideration that remains to be paid, if
possible. You must do so by withholding and
paying over the entire amount of each
successive payment of consideration until
the full 10% has been withheld and paid to
IRS, These amounts must be reported and
transmitted to IRS by the 20th day following
the date of each payment.

Transferred Property Not a U.S. Real
Property Interest.—If you acquire an
interest in property that is not a U.S. real
property interest, no withholding is required.
AUS. real property interest includes certain
interests in U.S. corporations, as well as
direct interests in real property and certain
associated personal property. See U.S. real
property interest, on page 2.

The following explains how to determine if
an interest in a corporation is a U.S. real
property interest subject to withholding. No

withholding is required on the acquisition of
an interest in a domestic corporation if

(1) any class of stock of the corporation is
regularly traded on an established securities
market, or (2) the transferee receives a
statement by the corporation specifying
that the interest is not a U.S. real property
interest. A corporation's statement may be
relied on only if it is dated not more than 30
days before the date of transfer. A
corporation's statement may be relied on
unless you know that the statement is false
or you receive a notice from your agent or
the transferor’s agent that the statement is
false.

Belated notice of false statement. —If
after the date of transfer you receive a notice
that a statement that an interest in a
corporation is not a U.S. real property
interest is false, follow the instructions under
Belated notice of false certification, above.

Generally, no withholding is required on
the acquisition of an interest in a foreign
corporation. However, it may be required if
such corporation has made the election to
be treated as a domestic corporation.
Transferor'’s Nonrecognition of Gain or
Loss.—If you receive a notice signed under
penalties of perjury stating that the
transferor is not required to recognize gain
or loss on the transfer because of a
nonrecognition provision of the Internal
Revenue Code, you may rely on the
transferor's notice unless (1) only part of
the gain qualifies for nonrecognition, or (2)
you know or have reason to know that the
transferor is not entitled to the claimed
nonrecognition treatment. No particular
form is required for this notice. By the 20th
day after the date of transfer, you must send
a copy of the notice of nonrecognition with a
cover letter giving your name, identification
number (if any), and address to the
Assistant Commissioner (International);
Director, Office of Compliance, IN:C:E:666;
950 L'Enfant Plaza South, S.W.; COMSAT
Building; Washington, DC 20024, See
Temporary Regulations section 1.1445-
9T(b) for more information on the
transferor's notice of nonrecognition.

Withholding Certificate Issued by IRS

Awithholding certificate may be issued by
IRS to reduce or eliminate withholding on
dispositions of U.S. real property interests
by foreign persons. The certificate may be
issued if (1) reduced withholding is
appropriate because the 10% amount
exceeds the transferor’s maximum tax
liability, (2) the transferor is exempt from
U.S. tax or nonrecognition provisions apply,
or (3) the transferee or transferor enters
into an agreement with IRS for the payment
of the tax. Either a transferee or transferor
may apply for the certificate.

Applications for a withholding certificate
must comply with the provisions of
Regulations sections 1.1445-3 and
1.1445-6 and Rev. Proc. 88-23, 1988-1
C.B. 787. In certain cases, you may use
Form 8288-B, Application for Withholding
Certificate for Dispositions by Foreign
Persons of U.S. Real Property Interests, to
apply for a withholding certificate. See
Form 8288-B. IRS will act on an application
by the 90th day after a complete application
is received.

Attach a copy of the withholding
certificate to Form 8288 if tax is withheld.