Mission Statement

To provide our International Practitioners the resources, education and technical tools for personal and professional growth to compete in today’s global Real Estate market

Dignitaries

Your LeadershipChairman, Kelly Cutchin

Vice-Chairman Marilia Neri

2016 Operations Committee• Gary Balanoff• Silvia Behan• Carolyn Bird• Mercedes Charneco• Colleen Coke• Cleberto Copetti

• Kelly Cutchin• Steve Graul• Sanjay Kumar• Beatrix Masotti• Marilia Neri• Rosie Papagiannakis

2016 DATES• Global Meeting: April 27, 2016 3:00-5:00 at ORRA/Canada

• Realtor Quest 2016: May 4-5, 2016 Toronto, Canada

• Education: At Home with Diversity, May 26 ,2016, 8:30-4:30 p.m./ORRA

• Global Meeting: June 28, 2016 3:00-5:00 at ORRA/Topic: TBD

Interested In Realtor Quest 2016• If you are Interested in more information on Realtor Quest 2016 in

Toronto, Canada, May 4-5. Please provide us with your name, cell and email address.

• The form to sign is at the registration desk.

2016 Sponsors

MEETING SPONSOR

Today’s Speakers• Nena Mahlum-Harding Bell International

• Christine Gabriel-Stuart Title

• Brian Bernal-MoneyCorp.

HARDING BELL INTERNATIONAL-NENA MAHLUM

FIRPTA

FIRPTA Definition•Foreign•Investment•Real•Property•Tax•Act (C.1980)

What is FIRPTA?

•FIRPTA is the Internal Revenue Service (IRS) regulation that allows the United States to tax foreign sellers on dispositions of U.S. Real Property interests.

Purpose of FIRPTA

•The purpose of FIRPTA withholding is to ensure that the Internal Revenue Service (IRS) receives enough funds to cover any Capital Gains Tax (CGT) liability that may arise from the sale of a property

FIRPTA applies to..•Sale, exchange, liquidation, redemption, gift, transfers, etc.

•U.S. real property interest includes sales of interests in parcels of real property as well as sales of shares in certain U.S. corporations that are considered U.S. real property holding corporations

FIRPTA applies to...•Nonresident alien individual owners•Foreign Corporation that has not made an election under section 897(i) of the Internal Revenue Code (IRC) to be treated as a Domestic Corporation

•A Foreign Partnership, A Foreign Trust, A Foreign Estate

FIRPTA applies to LLC’s•Single member LLC’s•Multiple related member LLC’s (husband and wife)

•LLC’s filing as Corporations•LLC’s filing as Partnerships (exception)

PATH Act of 2015

•Withholding rate changed•New affidavit for buyers•Effective February 15, 2016

FIRPTA dictates that…

•15% of the GROSS sale price is withheld at closing. Thereafter, sellers have two options for handling the 15% withheld funds...

FIRPTA Exceptions

•Current buyer’s affidavit less than $300,000

•Additional buyer’s affidavit less than $1,000,000 but greater than $300,000

Current Buyer’s Affidavit

•Sale price is less than $300,000.00•Buyer will reside in the property for more than 50% of the time for the next two years

Current Buyer’s Affidavit continued..

•Buyer liable for non-resident seller’s tax, interest, and penalties – Refer to IRS Reg 1445 Section (e) Liability of transferee upon failure to withhold

Additional Buyer’s Affidavit

•Sale price is between $300,000.00 and $1,000,000.00

•Buyer will reside in the property for more than 50% of the time over the next 2 years

Additional Buyer’s Affidavit continued…..

•FIRPTA withholding rate reduced from 15% to 10%

•Signed affidavit must be included in FIRPTA application

•Buyer protected

FIRPTA - Option 1•Seller opts to have the title company submit the withholding directly to IRS at closing

•Seller recovers refundable withholding by filing a U.S. Income Tax Return to report the sale the following year. - E.g. 2016 sale reported in 2017

FIRPTA - Option 2•Title company retains withholding in a non-interest bearing escrow account while the IRS reviews Form 8288-B and supporting documentation, aka FIRPTA Application

FIRPTA Process• Information about buyers and sellers is gathered and processed

•FIRPTA Application sent via registered mail to the FIRPTA department in Ogden, UT

FIRPTA Process cont..•Generally takes around 90 -120 days for the IRS to complete their review of the FIRPTA Application

•Once review is complete, IRS issues a withholding certificate to HBI to direct the closing agent as to how to disburse the 10% or 15% withholding

FIRPTASeller Requirements

•Sellers legal names, address & ITIN’s•Form 2848 Power of Attorney• IRS Consent Form•Line 8 Statement•Authorization Form•Purchase HUD

FIRPTASeller Requirements cont’d…

•Copies of prior years tax returns•Copies of receipts to support asset claims•Questionnaire for each tax year that has not been filed with the IRS*

*Remember, tax returns must be timely filed for each year that rental income is received regardless of any profit or loss

FIRPTAProcess for Listing Agent

•Contact HBI following all parties signing contract

•Provide HBI contact details of buyers agent, closing agent, closing date and sale price. Notify HBI if there is a change in sales price, closing date, buyers, etc. as any changes will affect the FIRPTA process

FIRPTABuyer Requirements

•Full name and address of each buyer•Tax ID# (SSN, EIN, or ITIN)*•Email address for each buyer•Phone number for each buyer*If buyer(s) or sellers do not have an ITIN, HBI will make applicationto IRS on their behalf

FIRPTA Process for Selling Agent

•Notify your client that FIRPTA will apply

•Reassure them that this is standard practice and that is ok to answer any questions they receive from HBI

•Provide HBI with buyers contact information as quickly as possible

In Summary

•You don’t need to be an expert on FIRPTA, you just need to know who to call when you need one!!

•HBI provides a full range of services for international and domestic clients

You May Be Interested To Know…

•500+ FIRPTA applications successfully filed with the Internal Revenue Service by Harding Bell International in 2015

•Harding Bell International represent clients in more than 110 countries of the world……

Please raise your hand…

Tel: 863 968 1010 Fax: 863 968 1020Email: info@HBItax.com Website: www.HBItax.com

The non-resident tax specialists for your non-resident clients

STUART TITLE: CHRISTINE GABRIEL

Contract to Closefor

Foreign Nationals

Stewart Title CompanyChristine Gabriel - Business

Development OfficerLeslie Wilson – Branch Manager

Clermont/Ocoee

Stewart Title is worldwide and over 100 years old. We currently have 33 offices just in Florida.

• About 80% of our business is with foreign nationals.

• We are very familiar with the process and the IRS requirements (FIRPTA).

• Our Clermont office is located in the Four Corners area which includes Osceola, Polk, Orange and Lake counties.

Cash deals with foreign sellers

Six Basic Steps for Closing Step 1

• Opening the title order• We receive the contract. At this time we

determine if we are dealing with foreign sellers and if FIRPTA applies.

• Do they need an accountant or do they have one?

• Will all parties be attending closing or mail-away?

The seller’s documents are not date sensitive. Depending on the situation, we may be able to “pre-sign” if the sellers are here temporarily but will not be at the time of closing. We can also hire a mobile notary generally anywhere in the U.S.

Step 2 Title Search

Once the order is entered, a title search is generated. This will reveal all parties on title, who needs to sign off, and if there any debts or liens against the property, open mortgages, unpaid taxes etc.

Step 3Title Examination

We examine the title work and prepare a commitment/binder. We work off of this commitment and are responsible for making sure all judgments, taxes, open mortgages, and ANY liens against the property are collected for and satisfied before we can close.

Step 4

Processing the file

•We review HOA, order survey if necessary and order payoffs etc.

• (Survey is optional in a cash deal)

Step 5

Documentation preparation and/or request to produce

• At this time we are ready to prepare our documents.

• If this is a mail-away we will send out sellers’ documents at this time via email or Fed Ex.

• Sellers’ documents need to be properly notarized (American Embassy) and originals need to be received back to us before we can disburse.

Step 5 cont.

Documentation preparation and/or request to produce

In a cash deal, our buyers’ documents can be emailed and do not need to be notarized or original, only seller’s docs need to be notarized and original. Passport copies must be included with ALL return documents.

Step 6 Settlement/closing the transaction

• The settlement statement or closing statement is prepared with fees and figures for the sellers review as well as the realtors’ review and approval.

• The withholding needs to be included on the settlement statement on page one if this is being withheld.

Step 6 cont.

• If we are not withholding and the funds are being sent in to the IRS, then the funds need to be sent within 20 days from the date of closing to the IRS.

• Once the closing statement is approved the seller is obligated to sign this statement.

Step 6 cont.

• The settlement statement can be emailed and does not need to be notarized.

• Once all documents are signed and received by Stewart Title and funds are received from the buyer, then we can disburse.

Withholding (FIRPTA)

• If we are holding the funds and the accountant has prepared the 8288B, then the funds stay with the title company until the release from the IRS is received.

• Once that is received the letter/release will show if there is a zero determination or if a portion of the withholding needs to be sent to the IRS.

Withholding cont.

• Again, if any funds are required to be sent to the IRS, this needs to be sent in within a 20 day period of the closing date or the date of the release whichever applies, or penalties will be accrued.

Quiz1. How long has Stewart Title been in business?2. What percent of our business in the Clermont office is

with foreign nationals?3. In a cash deal, what documents need to be notarized

and original? The buyers or sellers?4. In certain situations, can seller’s documents be “pre-

signed” or are they date sensitive?5. What is the “withholding” called that the IRS requires of

foreign nationals. 6. If the withholding is being sent to the IRS, how many

days does the title company have to send in the funds?

MoneyCorp: Brian Bernal

Currency Conversion andPayment Transfers

Presentation Agenda• Who or what is moneycorp?• Partner program for real estate professionals• moneycorp vs. a traditional bank• Currency updates • US Patriot Act• Utilizing moneycorp with a property sale• Repatriation examples• Q&A

Who or what is moneycorp?

Offices in USA, UK, Spain, Ireland, France, Brazil*

Referring partner programPersonal Account Manager

Directly refer your client through email or phoneName, phone #, email address

Updates on client activityFrom dedicated Account ManagerDeal notifications

Free marketing materials Website IFramePromo Freebies Daily Rates Email

Added Service for International ClientsReferral Fees

Moneycorp vs. Bank moneycorp

• Less then 1% margin• Personalized Currency Dealer• Monitor Exchange Rate• Lock in to exchange rate for 2

years• RPP • Mirror client

Traditional Bank

• 3%-10% Margin• Exchange rate on the

day • Poor trading execution• No risk management

tools

Why not use my bank?

Provider Exchange Rate USD GBP Difference

Bank 1.49(5% margin)

$300,000 £201,000

Moneycorp 1.44(1% margin)

$300,000 £208,00 7,000£10,000 USD

Interbank rate 1.43 GBP/USD

US Dollar 7year

USD impact on other currencies 7 year

Gain on 300K USD 7 year period

Currency 2009 2012 2016

GBP 1.67180,000 GBP

1.58190,000 GBP

1.39215,000 GBP

EURO 1.45207,000 E

1.33225,000 E

1.09275,000 E

CAD .95315,000 CAD

1.02294,000 CAD

.73410,000 CAD

AUD .92325,000 AUD

1.10275,000 AUD

.71420,000 AUD

Moneycorp and property sale solutions

• Hedge rate, lock into rate, manage currency risk• Offer the most seamless and cost effective way

to repatriate proceeds post property sale• Access money no matter where they are in the

world• US Patriot Act (Next Slide)

Take-aways/Summary

• USD is very strong at the moment and looking to continue

• You will continue to see international sellers and listings

• Make the proper introductions to your international team

• The sale and service isn’t done with an international client when funds are received from the buyer

Q & ABrian.bernal@moneycorp.com

+1 407 352 5890 office

Panel: Q & A

REMINDER:• 2016 Global Dues: The annual dues of $55 are due by Thursday,

March 31, 2016.

Thank you for your Participation