Capital gains for foreign corporations are not taxed in the U.S. since they are foreign-sourced. However, in the case of real property, foreign interest in the real property tax act (FIRPTA) is applicable. Under Canada U.S. Tax treaty 15% tax is withheld from gross proceeds of disposition of U.S. real property interest. When a Canadian corporation files U.S. corporate tax returns for a foreign corporation (1120-F), it might be able to recover FIRPTA.