The US Internal Revenue Service recently release proposed regulations under the Foreign Account Tax Compliance Act (FATCA) related to withholding and reporting. These rules can have a significant impact on entities that invest in US real estate.
This is the first of two alerts we are issuing regarding the implications for real estate companies, funds and joint ventures in connection with the proposed regulations related to the due diligence, withholding, reporting and certification obligations under Internal Revenue Code Sections 1471-1474 (commonly referred to as the Foreign Account Tax Compliance Act (FATCA).
This alert focuses on US entities and their obligations under FATCA. Part II of the series will focus on the classification of non-US entities under FATCA and the steps that non-US entities should be taking with respect to complying with this new regime.