Form 8288 (Rev. 10-88)

Page 4

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
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 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.

(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 partnership is required to withhold
tax equal to 34% of a foreign partner's or
beneficiary's distributive share of the gain
realized by the entity on the disposition of a
U.S. real property interest. 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
aU.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.—if a
domestic partnership that does not make
the large partnership election, explained
below, or that is not publicly traded
disposes of a U.S. real property interest and
any partner is a foreign person, the
partnership must withhold 34% of each
such foreign person's distributive share of
the gain realized and pay over such
withholding to IRS within 20 days of the
date of transfer. If 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 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 at
the time of transfer. The amount to be
withheld from each distribution is 34% of
the amount attributable to the foreign
interest holder's proportionate share of the
current balance of the entity's section
1445(e)(1) account. This election does not
apply to any real estate investment trust or
to any publicly traded partnership or trust.
Special rules apply to large partnerships or
trusts that make recurring sales of growing
crops and timber.

An entity’s section 1445(e)(1) account is
(1) the total net gain realized by the entity
on all section 1445(e)(1) transactions after
the date of the election, minus (2) the total
of all distributions made by the entity after
the date of the election from such total net
gain. For more information about the large
partnership or 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,
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 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.

U.S. Government Prantang Office: 1986-242-473/80030


8288 U.S. Withholding Tax Return for
(Ren October 1988) Dispositions by Foreign Persons of (OMB No, 1545-0902
Department of the Treasury U.S. Real Property Interests Expires 8-31-90

Internal Revenue Service

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

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
& Withholdingis at 10%... a a 7 Rrvount witha

; ; licable box.
» Withholding is of a reduced amount. <1. Ly Cheek applicable box.)

GEM] 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

oO 6 Total amount withheld

ge
2

Withholding is at 10% or 34% Foe ee
Withholding is of areducedamount . . . . . . . «LJ (Checkall applicable boxes.)
Large partnership or trust election to withhold at distribution C]

Under penalties of perjury, I declare that | have examined this return and accompanying attachments, and, to the best of my knowledge and belief, they are true, correct, and
complete. Declaration of preparer (other than withholding agent, partner, fiduciary, or corporate officer) 1s based on all information of which preparer has any knowledge.

°

Signature of withholding agent, partner, fiduciary, or corporate officer Title (if applicable) 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 (Rev. 10-88)


Form 8288 (Rev. 10-88)

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

the law or

theform. . .4hrs.,28min. 12min
Preparing and

sending the

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

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 the Internal Revenue
Service, Washington, DC 20224,
Attention: IRS Reports Clearance Officer,
TR:FP; or the, Office of Management and
Budget, Paperwork Reduction Project,
Washington, DC 20503.

Purpose of Form

A 10% withholding obligation is generally
imposed on the buyer or other transferee
(withholding agent) when 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.

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.—lf 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 to
IRS the required amount.

Publicly Traded Partnerships, Publicly
Traded Trusts, and REITs.—Distributions
from a partnership or trust either of which is
regularly traded on an established securities
market and distributions from a real estate
investment trust (REIT) are subject to
section 1445 and the regulations
thereunder. However, the method of paying
over and reporting the withholding to IRS is
governed by section 1461, the regulations
thereunder, and the deposit rules contained
in Regulations section 1.6302-2. Use
Forms 1042, Annual Withholding Tax
Return for U.S. Source Income of Foreign
Persons, and 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.

If, on the date of transfer, an application
for a withholding certificate (explained
later) is or has been submitted to IRS, you
must nevertheless 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 Internal Revenue
Service Center, 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 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) 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 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
Broperty Interest under Exceptions, on page

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


Form 8288 (Rev. 10-88)

Page 3

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, 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.

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.—If you
receive a certification of nonforeign status
from the transferor, signed under penalties
of perjury, stating that the transferor is nota
foreign person and containing the
transferor's name, address, and
identification number, 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 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 not a
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 ina
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:
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 Revenue Procedure 88-23,
1988-19 |.R.B. 32. 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.
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