Last Updated June 08, 2018

Law and Practice

Authors



Allen Matkins Leck Gamble Mallory & Natsis LLP is best known for representing clients in the real estate industry and clients for whom real estate is an important part of their success. It has a longstanding reputation as one of the leading real estate law firms in the United States, having assisted clients in the development, management, financing, acquisition and disposition of real property assets. Because Allen Matkins has one of the largest real estate departments on the West Coast – more than 100 attorneys – it can bring to every deal a vast network of resources and relationships with major players in the real estate industry. Key clients include global real estate owners, operators and developers, REITs, private equity firms, state pension funds, life insurance companies and Fortune 100 technology companies. The firm's five offices are located in four major metropolitan areas of California: Los Angeles (Downtown and Century City), Orange County, San Diego and San Francisco.

Income earned in the US by foreign investors is generally subject to a 30% withholding rate on certain income. Tenants are generally required to withhold 30% of the gross amount payable to the foreign-investor landlord. although this amount may be lower if there is a treaty between the US and the country of citizenship of the foreign investor. Foreign investors generally wish to avoid US tax reporting and the obligation to file tax returns. A foreign investor entity may form a corporation (sometimes called a “blocker corporation”), either foreign or domestic, with the foreign investor as the sole shareholder in order to avoid a direct US tax return filing obligation of such foreign investor or investors.

The Foreign Investment in Real Property Tax Act (FIRPTA) requires 15% tax of the total amount realized from the sale of real property by a foreign investor. Foreign investors may need to file for a tax refund if the amount withheld by the buyer exceeds the foreign investor’s tax liability. The 2017 Tax Cut and Jobs Act added a new provision requiring a 10% withholding on the sales of partnership interests by foreign persons for partnerships engaged in a US trade or business. This will be relevant when real estate deals are structured as sales of entity interests owning real estate rather than direct sales of the real estate.

Allen Matkins Leck Gamble Mallory & Natsis LLP

865 S Figueroa Street, Suite 2800
Los Angeles, CA 90017

(213) 622-5555

(213) 620-8816

communications@allenmatkins.com www.allenmatkins.com
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Authors



Allen Matkins Leck Gamble Mallory & Natsis LLP is best known for representing clients in the real estate industry and clients for whom real estate is an important part of their success. It has a longstanding reputation as one of the leading real estate law firms in the United States, having assisted clients in the development, management, financing, acquisition and disposition of real property assets. Because Allen Matkins has one of the largest real estate departments on the West Coast – more than 100 attorneys – it can bring to every deal a vast network of resources and relationships with major players in the real estate industry. Key clients include global real estate owners, operators and developers, REITs, private equity firms, state pension funds, life insurance companies and Fortune 100 technology companies. The firm's five offices are located in four major metropolitan areas of California: Los Angeles (Downtown and Century City), Orange County, San Diego and San Francisco.

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