Form 8288 (12-84)

Page 4

Section 1445(e)(1) transactions.—lf a
domestic partnership, trust, or estate
disposes of a U.S. real property interest and
any partner, beneficiary, or substantial
owner of the entity is a foreign person, the
partnership or fiduciary must withhold tax
with respect to each such foreign person.
The withholding obligation applies to the
fiduciary of a trust even if the grantor of the
trust or another person is treated as its
substantial owner, Generally, the
withholding is 10% of the foreign person’s
proportionate share. For information on
how to calculate the proportionate share of
the amount realized, see Temporary
Regulations section 1.1445-5T(c)(1).
Large partnership or trust election.—
Partnerships and trusts with more than 100
partners or beneficiaries may make the
large partnership or trust election to
withhold upon distribution rather than on
the date of transfer. See Temporary
Regulations section 1.1445-5T(c)(3)(iii).
Nonforeign status. —For 1985, if any
class of beneficial interests in a partnership
or trust is regularly traded on an established
securities market, that partnership or the
fiduciary of the trust may presume that each
partner or beneficiary of record is the
beneficial owner of that interest and that
each partner or beneficiary that has a
mailing address in the U.S. is a nonforeign

person. After 1985, a certificate of
nonforeign status or other means must be
relied on to determine that a partner or
beneficiary is not a foreign person, and
record owners may not be presumed to be
beneficial owners. See Temporary
Regulations section 1.1445-5T(c)(3).
Section 1445(e)(2) transactions.—A
foreign corporation that distributes a U.S.
real property interest must generally
withhold 28% of the gain recognized by the
corporation. No withholding or reduced
withholding is required if the corporation
receives from IRS a withholding certificate.
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 from IRS.
a withholding certificate.

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,
the office address of an entity.

Lines 2.—Enter a description of the
property including its location and the
nature of any improvements, such as an
apartment building or warehouse, or the
class or type and amount of interests in the
case of interests in a 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 make the large
partnership or 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
‘oecember 1984) Dispositions by Foreign Persons of U.S. OMB No. 1545-0902
Department ofthe Treasury Real Property Interests Expires 11-30-87

Internal Revenue Service

Complete Part I or Part II. Also complete Form(s) 8288-A.

[ Part | 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
6 a Withholding is at 10% Oo i 7 Amount withheld
i an ‘Check applicable box)
b Withholding is of a reduced amount oO ( PP )

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
5 a Withholding is at 10% or 28% oO 6 Total amount withheld
b Withholding is of a reduced amount CO (Check all applicable boxes)
¢ Large partnership or trust election to withhold at distribution [1]

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, correct, and com-
plete. Declaration of preparer (other than withholding agent, partner, fiduciary, or corporate officer) is based on all information of which preparer has any knowledge.

Signature of withholding agent, partner, fiduciary, or corporate officer Title Date
Signature of preparer other than withholding agent, partner, fiduciary, ‘Address Date
or corporate officer

For Paperwork Reduction Act Notice, see instructions . (Attach additional same size sheets if you need more space.) Form 8288 (12-84)


Form 8288 (12-84)

Page 2

General Instructions

(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.

Purpose of Form

Beginning January 1, 1985, 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 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.

Who Must File

Any buyer or other transferee of a U.S. real
property interest, and any 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 to
IRS the required amount.

When to File

Atransferee must report and transmit to
IRS the tax withheld by the 10th day after
the date of transfer. Timely mailing of Forms
8288 and 8288-A by U.S. mail will be
treated as timely filing.

If, on the date of transfer, an application
for a withholding certificate (explained
later) is pending with IRS, you must
nevertheless withhold. However, if the
application was filed not later than the 30th
day before the date of transfer, do not file
Form 8288 and transmit the withholding
until the 10th day after IRS's final
determination with respect to the
application. 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
10th day after the date of transfer.

Installment payments.—No withholding
is required on installment payments made
during 1985 if the disposition of the
property occurred before 1985. For
dispositions in 1985 and later, you must
withhold the full amount from 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 Internal Revenue
Service Center, Philadelphia, PA 19255.
Forms 8288-A Must Be Attached

Anyone who completes Form 8288 must
also complete 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, the
transferor must attach the stamped Copy B
of Form 8288-A to any U.S. income tax
return (e.g., Form L040NR, or 1120F) or
application for refund the transferor files
with IRS.

Penalties

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 to a 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) Adomestic 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 since June 18, 1980, 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, later.

Amount realized means the sum of the
cash paid, or to be paid, the fair market
value of 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 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 section 1445(e)(2) and (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 title, 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, or a 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.

Exceptions
You are not required to withhold if:

(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 received a notice of
nonrecognition of gain or loss from
the transferor, and you filed a copy of
the notice with IRS, or

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

For rules applicable to foreclosures or other
similar acquisitions, see Temporary
Regulations section 1.1445-2T(d)(3).

Purchase of residence for $300,000 or
less.—No withholding is required if you
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 or a member of your family has definite
plans to reside at the property for at least
50% of the number of days the property is
in use during each of the first two 12-month
periods following the date of transfer. 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.

Transferor not a foreign person.—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


Form 8288 (12-84)

Page 3

transferor’s name, address, and
identification number, you may rely on it
and you need not withhold. 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 acknowledgement of the
election received from IRS; if this 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.

You may also use other means to
determine that the transferor is not a
foreign person; but, if you do, and it is 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 10th 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 nota U.S. real
property interest, no withholding is
required. A U.S. 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, earlier. 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
aU.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.

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) you and the
transferor are related, (2) only part of the
gain qualifies for nonrecognition, or (3) 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 10th
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 Director, Foreign Operations District,
1325 K St., N.W., Washington, DC 20225.
See Temporary Regulations section
1.1445-2T(d)(2) 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.

The application for a withholding
certificate must be submitted to the
Director, Foreign Operations District, 1325
K St., N.W., Washington, DC 20225. No
form is required for the application, but the
application must comply with Temporary
Regulations section 1.1445-3T.

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 held 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
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,
earlier.

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 section 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.

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 partnership or the fiduciary of a
domestic trust or estate is required to
withhold tax on a foreign partner's or
beneficiary's proportionate share of the
amount realized by the entity on the
disposition of a U.S. real property interest. A
foreign corporation that has not made the
election under section 897(i) must withhold
28% of the gain it realizes 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 in a
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. Withholding may be required on the
transfer to a single transferee of an interest
described in Regulations section 1.897-
1(c)(2)(iii)(B).

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. A
domestic partnership that has more than
100 partners or the fiduciary of a domestic
trust that has more than 100 beneficiaries
may presume that a partner or beneficiary
that has a U.S. mailing address is a
nonforeign person for any transfers before
July 1, 1985. However, the presumption rule
does not apply if the partnership or fiduciary
has actual knowledge that the partner or
beneficiary is a foreign person.

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). No
withholding is required under section
1445(e)(5), relating to certain dispositions
of interests in partnerships, trusts, and
estates, until the effective date of a Treasury
Decision under section 897(g).