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Will I Owe Taxes on Cancelled Mortgage Debt?

By | Foreclosure Defense / Real Estate | No Comments

Cancelled debt is sometimes considered as taxable income that needs to be reported to IRS. When a mortgage lender forecloses to recover full or partial payment of the loan, it is considered a “sale” for tax purposes, not a forgiven debt. In that case, your accountant will determine whether you need to report capital gains or losses.

Where the lender accepts a short sale (lower price than balance of loan), you may have a forgiven debt that would normally be reported as taxable income, unless you qualify for an exception or exclusion.  In many cases, lenders will send the borrower a 1099-C form at the end of the year. This form is used to report Cancellation of Debt. Even if you receive a 1099-C, you can still claim an exception or exclusion. Discuss with your accountant to see what you qualify for.


Exceptions include things such as:

  • Debt would have been a deductible item for the borrower if it was actually paid
  • Some payments made under the Home Affordable Modification Program (HAMP). This program was discontinued as of December 2016
  • Cancelled debt obtained through a bankruptcy case
  • Insolvency immediately before the cancellation of the debt (amount by which total debts exceeded total assets)


Exclusions include things such as:

  • Debt cancelled in a Chapter 11 bankruptcy or during insolvency
  • Cancelled qualified real estate business debt
  • Principal residence debt under terms of the Mortgage Debt Relief Act. Discontinued in 2017 but can still apply to debt that is discharged in 2018 as long as the agreement was entered into by 2017.

NOTE: This post is for educational purposes only. Be sure to consult a tax attorney or qualified accountant for advice regarding your specific situation.

Remodeling and Renovation Contracts – What to Include

By | Foreclosure Defense / Real Estate | No Comments

We get a lot of complaints from property owners about issues with contractors hired to build, repair, or remodel. The root of the issues is usually due to lack of a clear written agreement. Many property owners hire and pay contractors based on a bid or proposal alone. These are usually skeletal terms and barely cover crucial terms that will make the agreement unambiguous. Most bids submitted by contractors simply lay out a sketchy list of tasks. couplewith_builder-2

This post will address the main things that we believe MUST be in writing and in specific form, and most importantly the agreement must be dated and signed by both parties. Any changes to the written agreement must be done with a signed, dated, written amendment, or properly written Change Order Request form, dated, and signed by all parties involved.


  1. SCOPE OF WORK – This must be specific. Example: Contractor will do A, B, and C. Contractor will provide labor and materials, and obtain all permits needed to complete the work. If there is specific type or brand of material to be used, specify that. The easiest way is to add a specifications sheet as an exhibit to your contract. This too should be dated and signed by both parties.
  2. COMPLETION DATE – Mention that the job will be completed by a certain date or within X days of date of signing this Agreement.
  3. CONTRACT PRICE– How much will the work listed under SCOPE OF WORK cost, inclusive of labor and materials? State that all labor, materials and permits are already included in the contract price and any additional costs must be approved by a CHANGE ORDER.
  4. DRAW SCHEDULE/ PROGRESS PAYMENTS – How will payments be made? You shouldn’t pay the whole Contract Price upfront. Phasing the payments is more beneficial. You can phase by time but it is best to phase as each stage is completed, e.g. as the work is at 25% completion, 50% completion, 75% completion and then 100% completed. You will need to define what constitutes these percentages e.g. Kitchen is 25% completion, Kitchen + Bathroom is 50% completion, Kitchen + Bathroom + Floors is 75% completion etc.
  5. CHANGE ORDERS – If you, or the contractor requests a change to the original SCOPE OF WORK, and that change is agreed upon, it must be in writing, signed by both parties. It will show the specific change, the price of the change, and how it affects TIME OF COMPLETION.
  6. STANDARD OF WORK – The contract should state that work will be completed with good workmanlike standards.
  7. LIABILITY INSURANCE– Example: Contractor warrants that he/she is adequately insured for injury to employees, workers, and other that may suffer a loss or injury as a result of the acts of the contractor or his employees, workers, and subcontractors.
  8. SUBCONTRACTORS– You may insist on only licensed subcontractors, or leave it up to the general contractor to decide. However, state that if the work to be done requires a license, the general contractor will ensure to hire a licensed subcontractor for that part of the project.
  9. WARRANTIES – What type of labor and materials’ warranty will you get? In order to have materials’ warranty, the contractor must give you receipts and paperwork for the materials. Labor warranty comes from the contractor and some of the subcontractors. Ask for the warranties to be put in writing and the number of years specified.
  10. RELEASES AND WAIVERS OF LIEN – Example: Contractor will provide appropriate Releases and Waivers of Lien for all work performed,  labor, materials, and equipment provided. You should get a Release of Lien for each stage/ phase completed. If a subcontractor or equipment company was used for a part of the work, make sure you have a Release of Lien from that party as well.

How to Undo a Default Judgment

By | Collection Defense, Consumer Rights, Foreclosure Defense / Real Estate, General / Litigation | No Comments

Default Judgment means a court judgment was granted against you, in your absence. Sometimes, there is a judgment against you that you don’t know about until after the fact. You can possibly still undo such a judgment. If the judgment was obtained wrongfully by not properly serving you with the court documents, and you can prove it, it will be voided. If it was obtained because you somehow missed the trial date, then you may be able to reverse the judgment if you can prove that you didn’t intentionally ignore the court proceeding.

Default-Judgment-blackwhiteYou or your lawyer may file one or more of the following:

  1. Motion to Set Aside Judgment
  2. Motion for New Trial
  3. Motion to Strike the Service of Process (if applicable)
  4. Bill of Review (if too much time has passed)
  5. Objection to Garnishment (if applicable)

Each motion listed above has specific facts that must be pleaded inside the document. Be sure to at least consult a trial lawyer before filing anything. New trial may be granted only within a certain number of days from the time of the judgment – usually maximum of 75 days in Texas. Don’t delay. Your lawyer will calculate the time frame for you. If you are already outside the applicable appeal time frame, then the Bill of Review will be used instead.

The court will make a decision on the motion(s), or bill of review, following a hearing. At the hearing, you will give testimony and may be asked questions by the opposing side and/or the judge. The other side will also give testimony as to what happened. If the court agrees with you, then that Judgment will be set aside and you will have a new trial hearing. If the service of process was struck as well, then the opposing side has to serve you properly first, before going to trial. If there was a garnishment in process such as a frozen bank account, that will be released if the underlying judgment is voided or reversed.

As always, it is best not to evade service because that could lead to an unfavorable default judgment against you and not all judgments can be undone.

3 Easy Resolutions That Actually Work

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…for Real Estate Buyers and Sellers. However, even if you aren’t planning to buy or sell, most of these also apply if you want more disposable cash, a better credit score, or property that is well-maintained, and in great condition. It’s that time of the year again! The time when we make (and break) resolutions for the new year. Easier resolutions have a higher chance of being completed. Here are our top 3 easy resolutions for Real Estate buyers and sellers: 

Start-now-1-concentrate3 RESOLUTIONS FOR BUYERS

Spring Clean Finances Weekly Start cleaning up your finances NOW. Decrease expenses and debt load and increase savings. Discontinue unnecessary or used services and set that money aside towards your real estate purchase. The trick is to start early. The dollars add up quickly.

Know Your Maximum Budget – Know your starting budget i.e. how much can you afford if paying cash? How much can you truly afford monthly for mortgage plus other bills? If taking a loan, get pre-approved to determine how much the bank/ mortgage company will loan you maximum. Also, determine whether you will need to have money for a down-payment.

Improve/ Maintain Credit Score – Be sure to maintain your credit score if already stellar. If it can be improved, it doesn’t hurt to figure out how to improve the score, which may give you better terms on a loan, even if going with owner-financing.

BONUS – Know your timeline. This may be determined by how much you have to clean up your finances/ credit score first. Lastly, find a trusted realtor to help with the buying process.


Spring Clean Property Weekly – Start cleaning up the property NOW. De-clutter as much as you can every week, then invest in a cleaning company for a deep cleaning of the property. It makes all the difference in the world if the floor boards and blinds are sparkly clean. Donate extra items that you haven’t used or touched in over a year.

Make a Repair a Week –  Pick a repair to complete in each month. It can be a minor or major repair like a broken mirror, burned out bulbs, missing outlet cover, or chipped paint…these can all affect the perception of the potential buyer. No detail is too small when it comes to showing the property in the best light.

Set a Timeline for Selling – Know your timeline for listing the property for sale, then work your way backwards. This may be affected by your individual circumstances, and/or how much you have to clean up the property, and make repairs first.

BONUS – Once you know your timeline, find a trusted agent to provide a fair market value analysis. This will help you set a listing price and realistic expectations for what the property might fetch.

Whatever path you choose to take, or resolutions you choose to make, we wish you all the best, and a very happy and prosperous New Year!

Portrait of a Real Estate Deal

By | Foreclosure Defense / Real Estate | No Comments

Buyers get super excited once they find that perfect property. Sellers get excited once they finally get a decent offer on their property. After the initial excitement, reality kicks in and it’s time to protect one’s interests. For the buyer, the main concern is doing adequate due diligence before handing over a pile of cash or taking on a big mortgage loan. For the seller, the concern is making sure the transaction goes smoothly without losing money in the process.

Much of the due diligence starts with selecting a real estate agent that is not cookie-cutter but actually keeps the client’s best interest first and foremost. For buyers using a loan, it is also very important to pick an ethical and diligent loan officer. These two players – Realtors and Loan Officers – will have a big impact on how stressful, smooth, or sloppy the process goes. 


Cash deals are finalized quicker since buyer has the funds ready -usually in 2 weeks to a month. Deals involving a lender typically take 60 days from Contract to Closing. That time frame can be affected by all the players listed below. Documentation, information, and services are requested from so many sources, before Closing documents can be finalized for Closing Day. 

  • Real Estate Agents
  • Surveyor
  • Lenders
  • Attorneys
  • Property Inspector
  • Appraiser
  • Title Company
  • Closing Agent
  • Homeowners’ Associations
  • Homeowners’ Insurance Company
  • County Records Office


  1. Contract: This is after an offer has been made and accepted. The written contract can be drafted by either side and will specify key terms such as the Price, Closing Date, Down Payment Amount, Earnest Money Amount,  Survey Needed or Not, Right to Inspect, Title Company. Termination Clause, Who pays for What, etc.
  2. Survey: The Buyer can agree to use an existing survey, or order a new survey if the existing survey is very old, or if there isn’t a survey in the property records already. The survey shows the exact layout and boundaries of the property. Seller typically pays for the survey and the buyer receives a copy.  
  3. Inspection: The Buyer can order an Inspection by a professional inspector, or rely on his/her own visual inspection. The Inspection report may reveal certain defects that will influence the buying decision, or trigger renegotiation of the terms or the purchase price. Buyer typically pays for the inspection and is not required to share the Inspection Report with the seller. 
  4. Appraisal: This happens behind the scenes and is done by the buyer’s chosen lender, if buyer will be taking a loan. The appraised value gives the lender an idea how much money to actually lend to the buyer. The reason is that the collateral must be worth more than the loan. Costs of appraisal are billed to the buyer (factored into the loan). Both buyer and seller can request a copy. 
  5. Title Search: This is done behind the scenes by the chosen Title Company. The search of the property records is done to ensure that the seller has clear title to the property and that there are no outstanding liens or potential other claimants to title. The Title Insurance is issued afterwards and is a way for the Title Company to protect the buyer from any oversight in title search.
  6. Title Report: Both parties will receive the Title Search Report. If a party is represented by a real estate agent, the report is sent to the agent. It is important to review this report carefully for any issues detected, and also for any restrictions that may affect the use of the property. Most times, a lawyer is needed for a thorough review and understanding of the report.
  7. Title Issues Resolved: The Title Company may find some title issues and insist that some things need to be done/ resolved before it will insure title i.e. before closing can take place. If the things are not resolved, parties can still close if they wish, but the particular Title Company would not insure the title. Sometimes the issues to be resolved are not required by the Title Company, but by the buyer. If no resolution can be reached, the contract may be cancelled, depending on the terms of the contract.
  8. Closing Day: The parties will show up at the Title Company for Closing which means they will finalize the deal on that day. Parties will review the final settlement statement which is a statement that itemizes the purchase price, costs, expenses, taxes etc., and shows which side pays what (as agreed under the contract.) Parties will also review and sign all disclosures given to them, and also sign the deed transfer documents. Buyer’s funds are released to the Closing Agent on the Closing day. Buyer’s lender will require buyer to select a homeowners’ insurance company before closing date. 
  9. Money Transferred: This happens at Closing or shortly after. Closing Agent will transfer the funds to the seller, either from the buyer directly, or from buyer’s lender. This is done after all signatures are verified and on the deed transfer documents. If there is any money that was put down as Earnest Money or Down=Payment, that will be released to the appropriate party as well.
  10. Deed Documents Recorded: The newly signed deed documents are recorded into the property records by the Title Company’s agent. Once the recorded documents are made available by the county, the parties will receive a copy.

NOTE: This synopsis is for a typical real estate purchase/ sale deal, not for a refinance, brand new build, or other type of deal. For questions specific to your situation, please contact our office directly.

Accessory Dwelling Units (Tiny Homes)

By | Foreclosure Defense / Real Estate | No Comments

A few years ago, the City of Austin approved a city wide change to allow accessory dwelling units on all SF-3 zoned lots as small as 5,750 square feet in every neighborhood in Austin. Most homes in the Austin area fit this description. The City’s objective was to improve the housing crisis by allowing people to create smaller, more affordable housing. portland-ADU-1

Accessory Dwelling Units (ADUs) a/k/a Secondary Dwelling Units (SDUs) are commonly referred to as garage apartments, granny flats, or tiny homes. They tend to stand beside or behind the primary residence, and are independently fully habitable. By law, they are usually no larger than 1,100 square feet and are at least 10 feet from the main house. They can be used as a guesthouse or rented out (see limitations below).

ADUs come with fewer requirements for building permits, than a traditional construction and can be beneficial for homeowners and investors to maximize their investments. Homeowners can earn extra income through the secondary property, and investors can purchase a single property and then later split it up and sell it as two separate units, for much more money. Many ADUs are created from detached garages which increases the value of the overall lot considerably. Keep in mind though that between permitting, plans, and construction, even a modest ADU will cost close to six figures. However, there are specific types of construction and rehab loans for these types of projects. It’s also sometimes possible to place a pre-manufactured structure on the existing lot and connect utilities. This will depend on the subdivision rules and any other deed restrictions in the area. Make sure to factor everything in before making the decision to add an ADU.

At the November 2015 meeting, the City of Austin Council approved the following changes to the ADU regulations:

  • Reduce minimum lot size for ADUs on SF-3 zoned lots to 5,750 square feet.
  • Set the maximum size of an ADU to 1,100 square feet or 0.15 Floor-Area ratio, whichever is smaller
  • Reduce building separation to 10 feet (front to back and side to side).
  • Eliminate requirement that an entry be more than 10 feet from a property line.
  • Remove driveway requirement
  • Provide one parking space for the ADU in addition to main structure parking.
  • Eliminate parking requirement for ADUs within 1/4 mile of an activity corridor that is served by public transit
  • Limit use as short-term rental to a maximum of 30 days per year for ADUs constructed after October 1, 2015.
  • Prohibit use as a Type 2 short term rental (owner not living on site)

What is a HomeStyle Renovation Loan?

By | Consumer Rights, Foreclosure Defense / Real Estate | No Comments

The HomeStyle Renovation loan is a Fannie Mae (FNMA) mortgage loan that allows a home buyer to purchase residential property (1-4 units) and include the renovation costs into the mortgage. This includes manufactured/ mobile homes. Not all lenders offer the HomeStyle loan. Eligible borrowers include individual home buyers, investors, nonprofit organizations, and local government agencies. The loan is a permanent 15 or 30-year fixed loan and since it’s FNMA backed, has similar interest rates and fees as a conventional mortgage. Renovation


It can help finance one or more major renovation projects, repairs and/or remodeling and is available for new and existing homes, even new construction. It could also be used to refinance an existing mortgage as long as funds for repairs or renovations are also needed. It’s convenient and economical since it allows borrowers can make repairs and renovations with a single-close first mortgage, rather than getting a second mortgage, home equity line of credit, or other more costly forms of financing.

The loan amount can be based on the as-completed (after repair) value of the home, rather than the total amount needed (purchase price plus renovations). This potentially allows for a larger loan than usual. The final loan-to-value ratio (LTV) will depend on the individual lender but can be up to 75% of the as-completed, appraised value of the property. FNMA recently made changes to allow LTV of up to 97% for some single-unit properties. The LTV may be lower for rental properties (non-primary).


  1. The property must need some repairs (moderate repairs are justifiable.)
  2. The property does not need to be currently habitable/ livable.
  3. The loan cannot be used for a tear-down/ demolition.
  4. The loan cannot be used solely to construct another residential dwelling on the property.
  5. Renovation General Contractor must be approved by the lender.
  6. All the subcontractors must work with one General Contractor to get paid.
  7. Lenders require General Contractor’s Scope Of Work (SOW) with itemized repair budget.
  8. Lender will require a *HUD inspector to inspect the property and provide a report of repairs needed. 
  9. Lender must approve the SOW and corresponding repair budget.

Under FNMA guidelines, for 2-4 unit properties, the lender is required to add a buffer to the repair budget i.e. a contingency reserve. This is usually 10% – 15% of the total budgeted cost of the renovation. That amount is added on top of the loan amount and is to help cover any costs that run over the estimated repair budget.

Remember, not all lenders offer the HomeStyle Renovation Loan and normal mortgage qualifications like minimum acceptable credit scores still apply. Consult with your loan officer for the full requirements.

*HUD is the U.S. Department of Housing and Urban Development.

Handling Consumer / Credit Card Debt

By | Collection Defense, Consumer Rights, General / Litigation | No Comments

Most clients come to us for help with handling credit card debt  (or other consumer debt) upon being sued by a creditor or collection company, or when looking to get a mortgage loan and needing to clean up their credit reports. This blog post covers options that are an alternative to bankruptcy.  Debt-doughboy-backing-country

The steps to handle the debt is similar for both groups of clients, except that with the first group of clients, the case is in already in court, and with the second group, the case is limited to their credit reports. If a lawsuit is involved, make sure to file a proper Answer within the require time frame so that the creditor is unable to get a judgment by default.




Try to get the matter dismissed by challenging the lawsuit or the reported debt. Here are some things that could lead to a dismissal:  The time period to sue has expired; The debt was already paid off or settled; The creditor/ collector sued the wrong person; The case is brought in the wrong court; The case is brought by the wrong party. There are other things that could lead to dismissal. Whenever in doubt, consult a debt defense attorney for help.


Send a written debt validation request to the creditor. A debt validation request is a request that the debtor makes for the creditor/ collector to prove up its right to collect the debt, as well as prove up the debt amount. Validation may fail due to lack of proper documentation to prove the charges, lack of proper documentation to prove assignment of the debt; or lack of a response to the validation request. If validation fails, you should seek a dismissal of the court case (if in court), and removal of item from credit reports.


If unable to get the matter dismissed, and the debt has been validated by the creditor, make an offer of settlement. The goal should be to settle for the terms most convenient and most favorable to you. It is important to know that the following components are possible and should be part of your offer:

  • Request a steep discount (start with 75% discount)
  • Request waiver of attorney fees and court costs
  • Request a delayed payment date
  • Request a payment (can be up to 36 months)
  • Request a Paid in Full/ Settled in Full letter (upon final payment)
  • Request suspension of filing of a Judgment
  • Request Release of Judgment (if a judgment was agreed to)
  • Request credit report update (upon final payment)

If you need legal guidance on any of the steps above, contact our office or seek other legal help. Make sure all offers and acceptance are in writing and that all the terms agreed to are covered inside a Settlement Agreement document signed by both sides. If not in writing, it will be difficult to prove or enforce the agreement in the future.

FHA Mortgage Loans: What Exactly Are They?

By | Foreclosure Defense / Real Estate | No Comments

An FHA loan is a mortgage that’s insured by the Federal Housing Administration (FHA). The FHA program was created to help the housing market by making loans accessible to people that couldn’t afford a big down payment, or with below average credit scores. The federal government insures these loans for FHA-approved lenders, to reduce the lenders’ risk of loss should a borrower default on the loan.

FHA loans are frequently used by first-time home buyers because they allow low down payments even with a low credit score. For non-FHA loans, lenders usually require a down payment of 20% of the loan amount. For example, for a $300,000 home, a traditional loan requires a 20% down payment of $60,000, while the same $300,000 home with an FHA loan will only require $30,000 at 10% down payment, or $10,500 at 3.5% down payment. The actual down payment amount for an FHA loan depends on the borrower’s credit score but will never exceed 10%. Essentially, borrowers can borrow 90% or 96.5% of the total loan amount.

Borrowers can qualify for an FHA loan with a down payment of as little as 3.5% if their credit score is 580 or higher. The down payment is 10% for credit scores between 500–579. As with any loan, the lower the credit score, the higher the interest rate.  Unlike regular loans, borrowers of FHA loans must pay mortgage insurance premiums, which is what protects the lender if a borrower defaults on the loan payments. The mortgage insurance is typically a small amount paid monthly (added to mortgage/ escrow payments) and is required for 11 years or for the life of the loan, depending on the terms of that loan.


  • Steady employment history for the past two years
  • Borrower intends to use the home as a primary residence
  • Borrower has a minimum credit score of 500
  • No bankruptcy in the last 2 years (Lender can make an exception)
  • No foreclosure in the last 3 years (Lender can make an exception)
  • Borrower’s mortgage payment (plus HOA fees, Property taxes, Homeowners’ Insurance and Mortgage Insurance) must be less than 30% of borrower’s gross income (or 40% if Lender approves)
  • Borrower’s monthly debt (mortgage, credit card payment, car payment, student loans, etc.), must be less than 43% of borrower’s gross income (or 50% if Lender approves)
  • Property must pass FHA appraisal standards (if seller won’t make repairs requested by lender, borrower can opt to pay for required repairs at closing; the funds will be held in escrow until the repairs are complete)

If you believe an FHA loan is right for you, ask your realtor, loan officer or lender to help you find out whether you may qualify for an FHA loan. Keep in mind though that not all lenders are FHA approved.

When Real Estate Seller is not a U.S. Resident

By | Foreclosure Defense / Real Estate, General / Litigation, Legal Haze | No Comments

Non-residents can acquire and invest in real estate in the U.S. by sending money over to purchase property located within the U.S. or by purchasing property while physically present in the U.S. Either way, Uncle Sam must get his cut. The law that governs these investments is the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA).

When the Seller is a non-resident, Buyer is responsible for withholding 10% of the Purchase Price, and reporting to the IRS on IRS forms 8288 and 8288-A (IRS will then send Buyer a stamped copy of the 8288-A and Buyer will give a copy to Seller). The forms and money must be sent to IRS within 20 days of the Closing date, or there might be penalties to the Buyer. Seller must have a TIN (Taxpayer Identification Number) prior to the closing date and can apply for one on the IRS website. These additional requirements are put on the Buyer to ensure that the U.S. government gets the taxes due from the Seller. Since the Buyer is the one bringing funds to the table, Buyer is in a better position to withhold some of the funds and send that directly to the Internal Revenue Service. Uncle-Sam-I-want-Your-Money-freshblue

If Buyer or Buyer’s agent suspects that Seller is a non-resident of the United States, Buyer must ask Seller directly if he/she is not a U.S. resident. If Seller maintains that he/she is a resident of the United States, Buyer must get an original notarized statement from Seller stating that the seller is not a foreign person and showing seller’s U.S. Taxpayer Identification Number (usually a Social Security Number). Buyer would then have no obligation to withhold any funds, or report anything to IRS. However, Buyer must keep an original copy of the signed Seller’s Statement of Residency. Even when Seller is a non-resident, there might be exemptions that allow the Buyer to skip the withholding altogether.

The 2 Most Common Exemptions are:

  1. If there will be no cash to seller (no profit). Seller will need to apply for a withholding certificate from the IRS that will grant Seller the exemption on the transaction using IRS form 8288-B. Seller must give Buyer a stamped copy as proof, and Buyer will then send all the forms in to IRS within 20 days after Closing.
  2. If the total sale price is $300,000 or less, and buyer or buyer’s family will be living in the house for the next 2 years. Buyer must sign an affidavit stating that the purchase price is under $300,000 and the buyer intends to occupy. The Title Company will usually provide a Buyer’s Affidavit of Intent to Reside. If not, have a real estate lawyer provide one to you. All parties must keep an original copy of the signed Buyer’s Affidavit of Intent to Reside but there will be no need to send any forms to IRS.

If there will be a profit to Seller, and Buyer will not be living in the house for the next 2 years, then Buyer must withhold 10% of the Purchase Price through the escrow officer, unless there is another exemption available. (15% for all distributions after February 2016). The escrow officer will send the funds to the IRS within 20 days of Closing. To avoid penalties, Buyer should make sure that the escrow officer at the Title company gets this done timely.

Lastly, remember that there are other exemptions not covered in this post. Contact a real estate lawyer or tax lawyer for help with figuring out if Buyer or Seller qualifies for any other exemption. Even when there is an exemption, the non-US resident Seller is still required to file a U.S. tax return to report the sale and then some taxes may still be due at that point. Sellers should seek guidance from their accountants or CPAs.