Foreign individuals who sell or transfer U.S. real property are subject to withholding tax, which is deducted by the buyer or transferee as a percentage of the amount realized. This withholding is reported using Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests.
Since this type of transaction involves foreign sellers, the tax return must be filed using Form 1040-NR (Non-Resident Alien Return) instead of Form 1040-SR.
How to Report Form 8288-A Withholding in the Software
To enter withholding from Form 8288-A, follow these steps:
Navigate to the Federal Section
From the left-side menu, go to Federal Section > Payments & Estimates.
Select Withholding on Dispositions by Foreign Persons on U.S. Real Property Interests.
Enter the Withholding Details
Input the withholding amount and other required information as shown on Form 8288-A.
Final Notes
✔️ This type of withholding applies to foreign individuals selling U.S. real estate.
✔️ The correct tax form for reporting this withholding is Form 1040-NR, not 1040-SR.
✔️ Ensure all details are entered accurately to avoid processing delays.
By following these steps, foreign individuals can properly report withholding on U.S. real property transactions using Form 8288-A in 1040-NR.