Prepared by:
Joseph E. Seagle, Esq.
Aspire Legal Solutions PLLC
📍 1901 W Colonial Drive, Orlando, FL 32804
📞 (844) 973-4043
🌐 www.aspirelegal.com
✉️ [email protected]
What is FIRPTA?
FIRPTA (Foreign Investment in Real Property Tax Act) is a federal law that requires foreign persons to pay withholding tax when they sell U.S. real estate. It is designed to ensure that non-resident aliens (NRAs) pay capital gains tax on U.S. property sales.
What is a Lady Bird Deed?
A Lady Bird deed (also called an “Enhanced Life Estate Deed”) allows a property owner to:
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✅ Retain full control of the property during life
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✅ Avoid probate by transferring the property to named beneficiaries upon death
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✅ Revoke or change the deed at any time
Does FIRPTA Apply to a Lady Bird Deed?
No FIRPTA Tax Due at Deed Creation
Creating a Lady Bird deed does not trigger FIRPTA, because:
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❌ There is no present transfer of ownership
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❌ The deed takes effect only upon death
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❌ There is no sale, exchange, or transfer for value
When Could FIRPTA Apply?
FIRPTA may still apply later if:
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🔹 The NRA sells the property during their lifetime
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🔹 The heirs or remaindermen (who inherit the property via the deed) sell it and they are also foreign persons
In these cases, FIRPTA withholding (typically 15% of the sale price) may be required.
Additional Considerations for Non-Resident Aliens (NRAs)
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U.S. Estate Tax applies to U.S. property owned at death by an NRA, even if transferred by a Lady Bird deed.
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Consider using LLCs or offshore trusts to hold U.S. real estate for better tax and privacy planning.
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Work with a U.S. legal and tax advisor to properly structure ownership and minimize tax liabilities.
💡 Pro Tip:
A Lady Bird deed is a powerful probate avoidance tool for Florida property owners—but it does not eliminate all tax risks for foreign owners. Work with an experienced attorney to design a full asset protection and tax mitigation plan.
Legal Disclaimer
IRS Circular 230 requires us to notify you that any U.S. federal tax advice contained in this communication, including attachments, was not written to be used and cannot be used to (1) avoid tax–related penalties or (2) promote, market or recommend any tax–related
matters addressed herein. Please contact us if you would like a written opinion upon which you can rely for avoiding penalties.
If you need a formal tax opinion, please contact us to request one in writing.
