Instructions for Form 8288, U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests

• Legal Form Number: 8288
• Year: 2023
• Issuer: Treasury Department
• Section: Treasury Department

Userid: CPM Schema:

instrx

Leadpct: 100% Pt. size: 10 Draft Ok to Print

AH XSL/XML Fileid: … ns/i8288/202301/a/xml/cycle06/source (Init. & Date) _______

Page 1 of 16 8:07 - 11-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Instructions for Form 8288

(Rev. January 2023)

(Use with the January 2023 revision of Form 8288)

U.S. Withholding Tax Return for Certain Dispositions by Foreign Persons

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code

unless otherwise noted.

Contents Page

What's New ............................... 1

Purpose of Form ............................ 2

General Instructions for Section 1445

Withholding ............................ 3

Who Must File .......................... 3

Amount To Withhold ...................... 3

When To File ........................... 3

Where To File ........................... 3

Forms 8288-A Must Be Attached ............. 3

Penalties .............................. 4

Definitions for Section 1445 Withholding ........ 4

Exceptions to Section 1445 Withholding ........ 5

Withholding at a Reduced Rate ........... 5

Withholding Not Required ............... 5

Late Filing of Certification or Notice ........... 7

Liability of Agents ........................ 7

Entities Subject to Section 1445(e) ............ 7

Section 1445(e)(1) Transactions ............. 7

Section 1445(e)(2) Transactions ............. 8

Section 1445(e)(3) Transactions ............. 8

Section 1445(e)(4) Transactions ............. 8

Section 1445(e)(5) Transactions ............. 8

Section 1445(e)(6) Transactions ............. 8

General Instructions for Section 1446(f)(1)

Withholding ............................ 8

Who Must File .......................... 8

Amount To Withhold ...................... 8

When To File ........................... 9

Where To File ........................... 9

Forms 8288-A Must Be Attached ............. 9

Penalties .............................. 9

Definitions for Section 1446(f)(1) Withholding .... 9

Exceptions to Section 1446(f)(1) Withholding

on Transfers of Non-PTP Interests .......... 9

Exceptions ......................... 10

Determining the Amount To Withhold ......... 10

Transfers of Partnership Interests Subject to

Withholding Under Sections 1445(e)(5)

and 1446(f)(1) ....................... 11

Liability of Agents ....................... 11

General Instructions for Section 1446(f)(4)

Withholding ........................... 11

Who Must File ......................... 11

Amount To Withhold ..................... 12

When To File .......................... 12

Contents Page

Where To File .......................... 12

Form 8288-C Must Be Attached ............. 12

Penalties ............................. 12

Exceptions to Section 1446(f)(4) Withholding ... 12

Withholding under Section 1446(f)(4) ......... 12

Buyer/Transferee Claiming Refund of Section

1446(f)(4) Withholding ................. 13

Specific Instructions for Form 8288 ............. 13

Withholding Agent Information .............. 13

Part I—To Be Completed by the Buyer or

Other Transferee Required To Withhold

Under Section 1445(a) ................. 14

Part II—To Be Completed by an Entity

Subject to the Provisions of Section

1445(e) ............................ 14

Part III—To Be Completed by Buyer/

Transferee Required To Withhold Under

Section 1446(f)(1) ..................... 14

Part IV—To Be Completed by the Partnership

Required To Withhold Under Section

1446(f)(4) ........................... 15

Part V—To Be Completed by Buyer/

Transferee Claiming a Refund of

Withholding Under Section 1446(f)(4) ...... 15

Paid Preparer .......................... 16

Future Developments

For the latest information about developments related to

Form 8288 and its instructions, such as legislation

enacted after they were published, go to IRS.gov/

Form8288.

What's New

•The Tax Cuts and Jobs Act added section 1446(f),

effective January 1, 2018, which generally requires that if

any portion of the gain on a disposition of an interest in a

partnership would be treated under section 864(c)(8) as

gain effectively connected with the conduct of a trade or

business in the United States, the transferee purchasing

the interest in the partnership from a non-U.S. transferor

must withhold a tax equal to 10% of the amount realized

on the disposition unless an exception to withholding

applies.

•Notice 2018-08, 2018-07 I.R.B. 352, available at

IRS.gov/IRB/2018-07_IRB#NOT-2018-08, temporarily

suspended the application of section 1446(f) to the

transfer of publicly traded partnership (PTP) interests.

•Notice 2018-29, 2018-16 I.R.B. 495, available at

IRS.gov/IRB/2018-16_IRB#NOT-2018-29, provided

interim guidance under section 1446(f)(1) on withholding

Jan 11, 2023 Cat. No. 57528F

Page 2 of 16 Fileid: … ns/i8288/202301/a/xml/cycle06/source 8:07 - 11-Jan-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

related to transfers of non-PTP interests and temporarily

suspended withholding under section 1446(f)(4).

•Proposed regulations under section 1446(f), available

at IRS.gov/IRB/2019-27_IRB#REG-105476-18, were

issued on May 7, 2019, for transfers of both non-PTP and

PTP interests. During the period that Notice 2018-29

applied, instead of applying the rules described in the

Notice, taxpayers and other affected persons may choose

to apply Regulations sections 1.1446(f)-1, 1.1446(f)-2,

and 1.1446(f)-5 of the proposed regulations in their

entirety to all transfers as if they were final regulations.

•T.D. 9926, published on November 30, 2020, available

at IRS.gov/IRB/2020-51_IRB#TD-9926, contains final

regulations (the section 1446(f) regulations) relating to

withholding and reporting required under section 1446(f)

(1), including requirements that apply to brokers effecting

transfers of PTP interests and partnership withholding

under section 1446(f)(4) (on distributions to a transferee

that failed to properly withhold under section 1446(f)(1)).

The section 1446(f) regulations also revise certain

requirements under section 1446(a) relating to

withholding and reporting on distributions made by PTPs.

•The section 1446(f) regulations generally apply to

transfers occurring on or after January 29, 2021.

However, in accordance with Notice 2021-51, 2021-36

I.R.B. 361, available at IRS.gov/IRB/

2021-36_IRB#NOT-2021-51, the following provisions of

the section 1446(f) regulations apply to transfers

occurring on or after January 1, 2023:

a. Withholding and reporting on transfers of PTP

interests,

b. The revisions included in the section 1446(f)

regulations relating to withholding on PTP distributions

under section 1446(a), and

c. Partnership withholding under section 1446(f)(4)

on distributions to a transferee that failed to properly

withhold under section 1446(f)(1).

•To reflect the withholding and reporting requirements

under sections 1446(f)(1) and (f)(4), applicable to

transfers occurring on or after January 1, 2023, updated

Forms 8288 and 8288-A and a new Form 8288-C are

being released.

•These instructions have been updated to incorporate

the use of this form for a transferee of a non-PTP interest

required to withhold under section 1446(f)(1) on the

amount realized from the transfer and for partnership

withholding under section 1446(f)(4) on distributions to a

transferee that failed to withhold under section 1446(f)(1).

•The General Instructions have been subdivided into

three major sections:

a. The General Instructions for Section 1445

Withholding,

b. The General Instructions for Section 1446(f)(1)

Withholding, and

c. The General Instructions for Section 1446(f)(4)

Withholding.

General Instructions

Purpose of Form

Form 8288 is used to report and transmit amounts

withheld on certain dispositions and distributions that are

subject to sections 1445 and 1446(f)(1). It is also used to

report and transmit amounts withheld under section

1446(f)(4) or to claim a credit or refund for amounts

withheld under section 1446(f)(4) for transfers occurring

on or after January 1, 2023.

Section 1445 withholding. A withholding obligation

under section 1445 is generally imposed on the buyer or

other transferee (withholding agent) when a U.S. real

property interest (USRPI) is acquired from a foreign

person. The withholding obligation also applies to foreign

and domestic corporations, qualified investment entities

(QIEs), and the fiduciaries of certain trusts and estates

that make certain distributions. This withholding serves to

collect U.S. tax that may be owed by the foreign person.

If an exception applies, you may be required to

withhold at a reduced rate or you may not be

required to withhold. See Exceptions to Section

1445 Withholding, later.

Section 1446(f)(1) withholding. Section 1446(f)(1)

generally imposes a withholding obligation on the buyer or

other transferee (withholding agent) on a transfer of an

interest in a partnership (including a distribution made with

respect to such interest) by a foreign person (transferor) if:

1. The transferor realized a gain on the sale, and

2. Any portion of the gain would be treated under

section 864(c)(8) as effectively connected with the

conduct of a trade or business within the United States.

If an exception applies, you may be required to

withhold at a reduced rate or you may not be

required to withhold. See Exceptions to Section

1446(f)(1) Withholding on Transfers of Non-PTP Interests,

later.

Section 1446(f)(4) withholding. Section 1446(f)(4)

generally imposes a withholding obligation on a

partnership that makes a distribution with respect to the

transferee of a partnership interest that failed to withhold

the required amount under section 1446(f)(1). A

transferee may claim a refund for the excess amount if the

partnership has withheld amounts in excess of the tax and

interest owed by the transferee.

If an exception applies, the partnership may not

be required to withhold. See Exceptions to

Section 1446(f)(4) Withholding, later.

When not to use Forms 8288 and 8288-A. Do not use

Forms 8288 and 8288-A, instead use Forms 1042 and

1042-S to report and pay over these withheld amounts for

any of the following.

1. A distribution with respect to gains from the

disposition of a USRPI from a trust that is regularly traded

on an established securities market is subject to section

1445 but is not reported on Forms 8288 and 8288-A.

2. A dividend distribution by a qualified investment

entity (QIE) to a nonresident alien or a foreign corporation

that is attributable to gains from sales or exchanges of a

USRPI by the QIE. However, a dividend distribution by a

QIE is not subject to withholding under section 1445 as a

gain from the sale or exchange of a USRPI if:

TIP

TIP

TIP

-2- Instructions for Form 8288 (Rev. 01-2023)