Asked and Answered
The seller is a foreign citizen and does not have a social security number. Does that prevent the seller from selling the apartment?Not necessarily. As a foreign citizen (that is, someone who is not a citizen of the United States), the seller may not have a social security number, but that will not be required to complete the closing documentation and consummate the closing. What can cause a problem is the IRS requirement to withhold ten percent of the purchase price as a “withholding” payment by the "foreign person" (that is a foreign citizen who does not have a green card and who not a resident alien), to cover any capital gains recognized by the seller when the apartment is sold. That withholding payment has to be made at closing and forwarded by the buyer’s attorney to IRS. Foreign sellers can have the amount of the actual capital gains payment that is due calculated in advance (which is usually done if the estimate is less than the ten percent withholding), but that requires planning by the seller’s attorney. If the payment due the IRS has not been calculated in advance, the ten percent withholding must be collected at closing and paid. To avoid the problem entirely, the seller can deliver a "FIRPTA" affidavit, by which the seller certifies that the Seller is not a foreign person, within the meaning of Section 1445 of the Internal Revenue Code. If the seller is a foreign person, obviously, that's not a solution.
In addition, if the seller is not a resident of New York State, or does not qualify for one of the exemptions, an estimated capital gains tax payment must also be made by the seller at closing to New York State.
