FIRPTA ia an acronym for the Foreign Investment Real Property Tax Act. It’s purpose is to assure that capital gain, if any, is paid before funds can be removed outside the taxing jurisdiction of the United States. As a matter of law, 10% of the gross sales price must be withheld by the purchaser of property acquired from a foreign person, unless there is an exemption from the tax. When applicable, FIRPTA withholding tax is paid directly to the I.R.S. within 20 days of the real estate transfer unless a withholding certificate is applied for prior to or up until the date of closing.