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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
providing instructions for how to get a TIN. When the • Such other QIE is a regulated investment company
transferor provides the IRS with a TIN, the IRS will provide (RIC) that issues certain redeemable securities.
the transferor with a stamped Copy B of Form 8288-A. Notwithstanding the above, the stock of the QIE will be
treated as held by a U.S. person if such other QIE is
Penalties domestically controlled.
Under section 6651, penalties apply for failure to file Form
3. Stock in a QIE that is held by any other QIE not
8288 when due and for failure to pay the withholding when
described above will be treated as held by a U.S. person
due. In addition, if you are required to but do not withhold
in proportion to the stock ownership of such other QIE
tax under section 1445, the tax, including interest, may be
which is (or is treated as) held by a U.S. person.
collected from you. Under section 7202, you may be
subject to a penalty of up to $10,000 for willful failure to Foreign person. A nonresident alien individual, a foreign
collect and pay over the tax. Corporate officers or other corporation that does not have a valid election under
responsible persons may be subject to a penalty under section 897(i) to be treated as a domestic corporation, a
section 6672 equal to the amount that should have been foreign partnership, a foreign trust, or a foreign estate. A
withheld and paid over to the IRS. resident alien individual is not a foreign person.
Definitions for Section 1445 Withholding A qualified foreign pension fund or any entity wholly
owned by such fund is not a foreign person for purposes
Agent. An agent is any person who represents the of section 1445. See sections 897(l) and 1445(f)(3) for
transferor or transferee in any negotiation with another more information.
person (or another person’s agent) relating to the
transaction or in settling the transaction. Qualified investment entity (QIE). A QIE is:
• Any REIT, and
Amount realized. The sum of the cash paid or to be paid • Any RIC which is a U.S. real property holding
(not including interest or original issue discount), the fair corporation or which would be a U.S. real property holding
market value of other property transferred or to be corporation.
transferred, and the amount of any liability assumed by
In determining if a RIC is a U.S. real property holding
the transferee or to which the USRPI is subject
corporation, the RIC is required to include as USRPIs its
immediately before and after the transfer. Generally, the
holdings of stock in a RIC or REIT that is a U.S. real
amount realized for purposes of this withholding is the
property holding company, even if such stock is regularly
sales or contract price.
traded and the RIC did not own more than 10% of such
Date of transfer. The first date on which consideration is stock in the case of a REIT (5% for dispositions before
paid or a liability is assumed by the transferee. However, December 17, 2015) or 5% of such stock in the case of a
for purposes of sections 1445(e)(2), (3), and (4), and RIC, and even if such stock is domestically controlled.
Regulations sections 1.1445-5(c)(1)(iii) and 1.1445-5(c) For more information, see Pub. 515.
(3), the date of transfer is the date of distribution that
creates the obligation to withhold. Payment of Qualified substitute. For this purpose, a qualified
consideration does not include the payment before substitute is:
passage of legal or equitable title of earnest money (other • The person (including any attorney or title company)
than pursuant to an initial purchase contract), a good-faith responsible for closing the transaction, other than the
deposit, or any similar amount primarily intended to bind transferor’s agent; and
the parties to the contract and subject to forfeiture. A • The transferee’s agent.
payment that is not forfeitable may also be considered Transferee. Any person, foreign or domestic, that
earnest money, a good-faith deposit, or a similar sum. acquires a USRPI by purchase, exchange, gift, or any
Domestically controlled QIE. A QIE is domestically other transfer.
controlled if at all times during the testing period less than Transferor. For purposes of this withholding, this means
50% in value of its stock was held, directly or indirectly, by any foreign person that disposes of a USRPI by sale,
foreign persons. The testing period is the shorter of: exchange, gift, or any other disposition. A disregarded
• The 5-year period ending on the date of the disposition entity cannot be the transferor for purposes of section
(or distribution), or 1445. Instead, the person considered as owning the
• The period during which the entity was in existence. assets of the disregarded entity for federal tax purposes is
For the purpose of determining whether a QIE is regarded as the transferor. A disregarded entity for
domestically controlled, the following rules apply. these purposes means an entity that is disregarded as an
1. A person holding less than 5% of any class of stock entity separate from its owner under Regulations section
of a QIE which is regularly traded on an established 301.7701-3, a qualified REIT subsidiary as defined in
securities market in the United States at all times during section 856(i), or a qualified subchapter S subsidiary
the testing period will be treated as a U.S. person unless under section 1361(b)(3)(B).
the QIE has actual knowledge that such person is not a Transferee’s or transferor’s agent. For purposes of
U.S. person. section 1445(e), a transferee’s or transferor’s agent is any
2. Any stock in a QIE that is held by another QIE will person who represents or advises an entity, a holder of an
be treated as held by a foreign person if: interest in an entity, or a fiduciary with respect to the
• Any class of stock of such other QIE is regularly traded planning, arrangement, or completion of a transaction
on an established securities market, or described in sections 1445(e)(1) through (4).
-4- Instructions for Form 8288 (Rev. 01-2023)
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