First National Title Insurance (FNTI) is proud to announce the newest title agent to join our family of agents, Town Square Title! Based out of Waxahachie and with over 200 years of combined expertise in the title business, their knowledgeable team is prepared to accomplish your needs. If you need a full title examination under a P-24 agreement or to refer a deal when it’s out of your area to one of their four offices within Ellis or Johnson counties, please contact them at:
Q: Is there a new reporting requirement issued by the U.S. Department of the Treasury for closings on some properties in Texas and Florida to aid in the collection of information for financial crimes enforcement?
A: Yes, a GTO (geographic targeting order) was issued for Bexar County, Texas and Miami-Dade, Broward and Palm Beach Counties, Florida, starting August. 28, 2016. The transactions that fall within the reporting requirement are: (i) the property is residential (1-4 family); (ii) The sales price for Bexar County is $500,000 or more or $1,000,000 or more for the Florida counties; (iii) the purchaser is a legal entity, such as a corporation, LLC or partnership; (iv) no bank or lender is involved; and (v) any part of the purchase funds (including the earnest money deposit) are received via cash or a check, whether a personal check, business check or a cashier’s check, certified check, official check etc. Wired funds are excluded.
The title agent closing the transaction must file the report with the Dept. of the Treasury within 30 days of the closing. Agents must use FinCen Form 8300 for the reporting. The reporting requires the inclusion of the information relative to the transaction as well as information derived from the authority or organizational documents for all entities in the transaction and for the beneficial owners that own 25% or more of the entity.
Q: Regarding FIRPTA, is a title agent required to complete the IRS forms and determine the amount to be withheld when a foreign person is selling property?
A: No, and if a title agent does so, it might expose the agent to additional liability if the forms are not completed correctly and/or the amount withheld is incorrect.
Background: “FIRPTA” was adopted in 1980 as the Foreign Investment in Real Property Tax Act and is a US law that imposes income tax on foreign persons disposing of a real property interest located in the United States. A foreign person is one who is not a permanent resident (but may have a social security number or taxpayer ID number issued by the United States). A lawful permanent resident (even if that person is not a citizen of the USA) is not considered to be a foreign person. A certification provided by any person stating he/she is not a foreign person can be relied upon (unless the party receiving the certification has knowledge otherwise that the person is a “foreign person”).
Section 1445 of the IRS Code places responsibility on a buyer when acquiring real property from a foreign person for withholding and remitting of any applicable amount. A buyer should consult his/her/their/its own financial and/or legal advisor for whether the transaction qualifies for any exception allowed in the law or whether the buyer should direct the title agent to withhold a portion of the sale proceeds. If the buyer instructs the title agent to withhold and remit to the IRS, the required forms are to be completed by the buyer and provided to the title agent along with a preaddressed envelope that will be used to send both the funds and required forms.
We suggest that each agent may wish to create a form that the parties to the transaction (i.e., buyer and seller) sign that (1) financial and/or legal counsel has been consulted, or (2) financial and/or legal counsel has not been consulted but having had opportunity to do so; and then continue with directions to the title agent to deduct $____ amount (the amount determined and completed by the buyer). If the parties make the decision not to withhold, no matter the reason, give consideration to including hold harmless and indemnification language for the title agent that the parties acknowledges that it is the buyer’s obligation to remit payment, if required and penalties for failure to remit may be assessed against the buyer.
Just in case you are curious about the forms discussed and instructions regarding the forms, those may be located on the IRS website:
This is a story that I’ve wanted to tell for some time, and because the Major League Baseball players report to Spring Training middle of this month, I find it fun to tell now. Chris and Matt Withrow are professional baseball players (both Pitchers who I have followed since they were in High School) and the sons of Mike and Judy Withrow. Mike and Judy own and operate Basin Abstract & Title in Odessa, Texas. They have built an amazing title company and were one of our first title agents at FNTI (since October 2012). After working with Mike and Judy for years at my previous employer, the relationship has become personal as we follow the success of our children and our company’s.
Chris (their oldest son) was drafted out of high school in 2007, the first round pick by the Los Angeles Dodgers, and pitched in the major leagues for the Dodgers in 2013 when they reached the National League Championship Series. He was traded to the Atlanta Braves this past May, 2015. His’s younger brother Matt finished a decorated college career Texas Tech last June, 2015. You’ll never guess which Major League Baseball team drafted him—the Atlanta Braves!! Cool story. Could we see another “Dizzy” and Paul Dean in the Major Leagues?
Both will be preparing for the upcoming long-season by attending practices, going through drills, and getting physically ready to perform. As their dad Mike knows, we in the title industry must also train for what we do. FNTI has been presenting free monthly webinars taught by FNTI Executive VP George Stablein to complement the many classes of education offered online at www.fnti.com. Similarly to the online courses, these live webinars will keep you ready for your season in the title business by offering information pertinent to today’s current issues and provide solutions that can be used daily. There is also 1.0 hour of continuing education credit available for Texas escrow officers. It is only fitting that during MLB Spring Training month that I motivate you to utilize our online courses and attend our monthly webinars on the second Tuesday of every month. Contact Suzanne Tinsley at email@example.com for more information concerning the FNTI webinars.