Internal Revenue Code · 26 U.S.C.
§ 1445. Withholding of tax on dispositions of United States real property interests
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 1445
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- July 18, 1984 by Pub. L. 98–369
- Last amended
- December 22, 2017 by Pub. L. 115–97
- Amendments
- 11 dated changes in the source credit
- Length
- 6 subsections · 2,655 words · about 12 min to read
- Defines
- 9 terms
- Cross-references
- cites 5; cited by 3 Code sections and 16 other regulations
- Regulations
- 10 issued under this section
Except as otherwise provided in this section, in the case of any disposition of a United States real property interest (as defined in section 897(c)) by a foreign person, the transferee shall be required to deduct and withhold a tax equal to 15 percent of the amount realized on the disposition.
Except as provided in paragraph (7), this paragraph applies to the disposition if the transferor furnishes to the transferee an affidavit by the transferor stating, under penalty of perjury, the transferor’s United States taxpayer identification number and that the transferor is not a foreign person.
This paragraph applies to the disposition if the transferee receives a qualifying statement at such time, in such manner, and subject to such terms and conditions as the Secretary may by regulations prescribe.
This paragraph applies if the disposition is of a share of a class of stock that is regularly traded on an established securities market.
No person shall be required to deduct and withhold any amount under subsection (a) with respect to a disposition which is treated as a disposition of a United States real property interest solely by reason of section 897(h)(5).
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this paragraph.
The amount required to be withheld under this section with respect to any disposition shall not exceed the amount (if any) determined under subparagraph (B) as the transferor’s maximum tax liability.
At the request of the transferor or transferee, the Secretary shall determine, with respect to any disposition, the transferor’s maximum tax liability.
Subject to such terms and conditions as the Secretary may by regulations prescribe, a transferor may seek and obtain a refund of any amounts withheld under this section in excess of the transferor’s maximum tax liability.
At the request of the transferor or transferee, the Secretary may prescribe a reduced amount to be withheld under this section if the Secretary determines that to substitute such reduced amount will not jeopardize the collection of the tax imposed by section 871(b)(1) or 882(a)(1).
The Secretary shall take action with respect to any request described in subparagraph (A) within 90 days after the Secretary receives the request.
If any transferor’s agent, transferee’s agent, or qualified substitute is required by paragraph (1) to furnish notice, but fails to furnish such notice at such time or times and in such manner as may be required by regulations, such agent or substitute shall have the same duty to deduct and withhold that the transferee would have had if such agent or substitute had complied with paragraph (1).
An agent’s or substitute’s liability under subparagraph (A) shall be limited to the amount of compensation the agent or substitute derives from the transaction.
In the case of any distribution by a foreign corporation on which gain is recognized under subsection (d) or (e) of section 897, the foreign corporation shall deduct and withhold under subsection (a) a tax equal to the highest rate of tax in effect for the taxable year under section 11(b) multiplied by the amount of gain recognized on such distribution under such subsection.
If a domestic corporation which is or has been a United States real property holding corporation (as defined in section 897(c)(2)) during the applicable period specified in section 897(c)(1)(A)(ii) distributes property to a foreign person in a transaction to which section 302 or part II of subchapter C applies, such corporation shall deduct and withhold under subsection (a) a tax equal to 15 percent of the amount realized by the foreign shareholder. The preceding sentence shall not apply if, as of the date of the distribution, interests in such corporation are not United States real property interests by reason of section 897(c)(1)(B). Rules similar to the rules of the preceding provisions of this paragraph shall apply in the case of any distribution to which section 301 applies and which is not made out of the earnings and profits of such a domestic corporation.
A domestic or foreign partnership, the trustee of a domestic or foreign trust, or the executor of a domestic or foreign estate shall be required to deduct and withhold under subsection (a) a tax equal to 15 percent of the fair market value (as of the time of the taxable distribution) of any United States real property interest distributed to a partner of the partnership or a beneficiary of the trust or estate, as the case may be, who is a foreign person in a transaction which would constitute a taxable distribution under the regulations promulgated by the Secretary pursuant to section 897.
To the extent provided in regulations, the transferee of a partnership interest or of a beneficial interest in a trust or estate shall be required to deduct and withhold under subsection (a) a tax equal to 15 percent of the amount realized on the disposition.
If any portion of a distribution from a qualified investment entity (as defined in section 897(h)(4)) to a nonresident alien individual or a foreign corporation is treated under section 897(h)(1) as gain realized by such individual or corporation from the sale or exchange of a United States real property interest, the qualified investment entity shall deduct and withhold under subsection (a) a tax equal to the highest rate of tax in effect for the taxable year under section 11(b) (or, to the extent provided in regulations, 20 percent) multiplied by the amount so treated.
The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations providing for exceptions from provisions of this subsection and regulations for the application of this subsection in the case of payments through 1 or more entities.
The term “transferor” means the person disposing of the United States real property interest.
The term “transferee” means the person acquiring the United States real property interest.
The term “transferor’s unsatisfied withholding liability” means the withholding obligation imposed by this section on the transferor’s acquisition of the United States real property interest or on the acquisition of a predecessor interest, to the extent such obligation has not been satisfied.
(Added Pub. L. 98–369, div. A, title I, § 129(a)(1), July 18, 1984, 98 Stat. 655; amended Pub. L. 99–514, title III, § 311(b)(4), title XVIII, § 1810(f)(2)–(4)(A), (5), (6), (8), Oct. 22, 1986, 100 Stat. 2219, 2827, 2828; Pub. L. 100–647, title I, § 1003(b)(3), Nov. 10, 1988, 102 Stat. 3384; Pub. L. 103–66, title XIII, § 13221(c)(3), Aug. 10, 1993, 107 Stat. 477; Pub. L. 104–188, title I, § 1704(c)(1), Aug. 20, 1996, 110 Stat. 1878; Pub. L. 105–34, title III, § 311(c)(1), Aug. 5, 1997, 111 Stat. 835; Pub. L. 108–27, title III, § 301(a)(2)(C), May 28, 2003, 117 Stat. 758; Pub. L. 109–222, title V, §§ 505(b), 506(b), May 17, 2006, 120 Stat. 356, 358; Pub. L. 110–289, div. C, title I, § 3024(a)–(c), July 30, 2008, 122 Stat. 2895; Pub. L. 112–240, title I, § 102(c)(1)(C), (3), Jan. 2, 2013, 126 Stat. 2319; Pub. L. 114–113, div. Q, title III, §§ 323(b), 324(a), (b), Dec. 18, 2015, 129 Stat. 3103; Pub. L. 115–97, title I, § 13001(b)(3)(A)–(C), Dec. 22, 2017, 131 Stat. 2097.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
- foreign person § 1445(f)(3)
- qualified substitute § 1445(f)(6)
- qualifying statement § 1445(b)(4)(B)
- transferee § 1445(f)(2)
- transferee’s agent § 1445(d)(4)
- transferor § 1445(f)(1)
- transferor’s agent § 1445(d)(3)
- transferor’s maximum tax liability § 1445(f)(4)
- transferor’s unsatisfied withholding liability § 1445(f)(5)
Regulations under this section
Treasury regulations (26 CFR) issued under § 1445
- § 1.1445-1 Withholding on dispositions of U.S. real property interests by foreign persons: In general.
- § 1.1445-2 Situations in which withholding is not required under section 1445(a).
- § 1.1445-3 Adjustments to amount required to be withheld pursuant to withholding certificate.
- § 1.1445-4 Liability of agents.
- § 1.1445-5 Special rules concerning distributions and other transactions by corporations, partnerships, trusts, and estates.
- § 1.1445-6 Adjustments pursuant to withholding certificate of amount required to be withheld under section 1445(e).
- § 1.1445-7 Treatment of foreign corporation that has made an election under section 897(i) to be treated as a domestic corporation.
- § 1.1445-8 Special rules regarding publicly traded partnerships, publicly traded trusts and real estate investment trusts (REITs).
- § 1.1445-10T Special rule for Foreign governments (temporary).
- § 1.1445-11T Special rules requiring withholding under § 1.1445-5 (temporary).
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 5 other sections
- § 897(c) Disposition of investment in United States real property
- § 871(b)(1) Tax on nonresident alien individuals
- § 11(b) Tax imposed
- § 302 Distributions in redemption of stock
- § 301 Distributions of property
Cited by 3 Code sections
- § 897(i)(1)(B) Disposition of investment in United States real property
- § 1446(f)(2)(B)(i) Withholding of tax on foreign partners’ share of effectively connected income
- § 6039C(d) Returns with respect to foreign persons holding direct investments in United States real property interests
Cited in 16 regulations not issued under it
- § 1.897-1 Taxation of foreign investment in United States real property interests, definition of terms.
- § 1.897-2 United States real property holding corporations.
- § 1.897-3 Election by foreign corporation to be treated as a domestic corporation under section 897(i).
- § 1.897-5T Corporate distributions (temporary).
- § 1.897-7T Treatment of certain partnership interests as entirely U.S. real property interests under sections 897(g) and 1445(e) (temporary).
- § 1.897-9T Treatment of certain interest in publicly traded corporations, definition of foreign person, and foreign governments and international organizations (temporary).
- § 1.897(l)-1 Exception for interests held by foreign pension funds.
- § 1.1441-1 Requirement for the deduction and withholding of tax on payments to foreign persons.
- § 1.1441-3 Determination of amounts to be withheld.
- § 1.1446-0 Table of contents.
- § 1.1446-3 Time and manner of calculating and paying over the 1446 tax.
- § 1.1446-4 Publicly traded partnerships.
- § 1.1446(f)-1 General rules.
- § 1.1471-0 Outline of regulation provisions for sections 1471 through 1474.
- § 1.1471-1 Scope of chapter 4 and definitions.
- § 1.1474-6 Coordination of chapter 4 with other withholding provisions.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 115–97Parts changed in 2017: (e)(1) (e)(2) (e)(6)
- Amended by Pub. L. 114–113Parts changed in 2015: (a) (c)(4) (e)(3) (f)(3)
- Amended by Pub. L. 112–240Parts changed in 2013: (e)(1) (e)(6)
- Amended by Pub. L. 110–289Parts changed in 2008: (b)(7) (b)(9) (d) (d)(1) (d)(2) (f)(6)
- Amended by Pub. L. 109–222Parts changed in 2006: (b)(8) (e)(6)
- Amended by Pub. L. 108–27Parts changed in 2003: (e)(1)
- Amended by Pub. L. 105–34Parts changed in 1997: (e)(1)
- Amended by Pub. L. 104–188Parts changed in 1996: (e)(3)
- Amended by Pub. L. 103–66Parts changed in 1993: (e)(1)
- Amended by Pub. L. 100–647Parts changed in 1988: (e)(1)
- Amended by Pub. L. 99–514Parts changed in 1986: (b)(3) (d)(1)(A) (d)(1)(B)(i) (e)(1) (e)(2) (e)(3) (e)(4) (e)(6)
- Added by Pub. L. 98–369
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 3 WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
- Subchapter A Nonresident Aliens and Foreign Corporations
Nearby sections
- § 1441 Withholding of tax on nonresident aliens
- § 1442 Withholding of tax on foreign corporations
- § 1443 Foreign tax-exempt organizations
- § 1444 Withholding on Virgin Islands source income
- § 1445 Withholding of tax on dispositions of United States real property interests
- § 1446 Withholding of tax on foreign partners’ share of effectively connected income
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
2017—Subsec. (e)(1). Pub. L. 115–97, § 13001(b)(3)(A), in introductory provisions, substituted “the highest rate of tax in effect for the taxable year under section 11(b)” for “35 percent” and “multiplied by the gain” for “of the gain”.
Subsec. (e)(2). Pub. L. 115–97, § 13001(b)(3)(B), substituted “the highest rate of tax in effect for the taxable year under section 11(b) multiplied by the amount” for “35 percent of the amount”.
Subsec. (e)(6). Pub. L. 115–97, § 13001(b)(3)(C), substituted “the highest rate of tax in effect for the taxable year under section 11(b)” for “35 percent” and “multiplied by the amount” for “of the amount”.
2015—Subsec. (a). Pub. L. 114–113, § 324(a), substituted “15 percent” for “10 percent”.
Subsec. (c)(4). Pub. L. 114–113, § 324(b), added par. (4).
Subsec. (e)(3) to (5). Pub. L. 114–113, § 324(a), substituted “15 percent” for “10 percent”.
Subsec. (f)(3). Pub. L. 114–113, § 323(b), substituted “any person other than—” for “any person other than a United States person.” and added subpars. (A) and (B).
2013—Subsec. (e)(1). Pub. L. 112–240, § 102(c)(1)(C), substituted “20 percent” for “15 percent” in introductory provisions.
Subsec. (e)(6). Pub. L. 112–240, § 102(c)(3), substituted “20 percent” for “15 percent (20 percent in the case of taxable years beginning after December 31, 2010)”.
2008—Subsec. (b)(7). Pub. L. 110–289, § 3024(c)(1), amended par. (7) generally. Prior to amendment, par. (7) related to special rules for paragraphs (2) and (3).
Subsec. (b)(9). Pub. L. 110–289, § 3024(a), added par. (9).
Subsec. (d). Pub. L. 110–289, § 3024(c)(2)(C), substituted “, transferee’s agents, or qualified substitutes” for “or transferee’s agents” in heading.
Subsec. (d)(1). Pub. L. 110–289, § 3024(c)(2)(A), amended par. (1) generally. Prior to amendment, par. (1) related to notice of false affidavit; foreign corporations.
Subsec. (d)(2). Pub. L. 110–289, § 3024(c)(2)(B), amended par. (2) generally. Prior to amendment, par. (2) related to failure to furnish notice.
Subsec. (f)(6). Pub. L. 110–289, § 3024(b), added par. (6).
2006—Subsec. (b)(8). Pub. L. 109–222, § 506(b), added par. (8).
Subsec. (e)(6), (7). Pub. L. 109–222, § 505(b), added par. (6) and redesignated former par. (6) as (7).
2003—Subsec. (e)(1). Pub. L. 108–27 substituted “15 percent” for “20 percent”.
1997—Subsec. (e)(1). Pub. L. 105–34 substituted “20 percent” for “28 percent” in introductory provisions.
1996—Subsec. (e)(3). Pub. L. 104–188 inserted at end “Rules similar to the rules of the preceding provisions of this paragraph shall apply in the case of any distribution to which section 301 applies and which is not made out of the earnings and profits of such a domestic corporation.”
1993—Subsec. (e)(1), (2). Pub. L. 103–66 substituted “35 percent” for “34 percent”.
1988—Subsec. (e)(1). Pub. L. 100–647 inserted “(or, to the extent provided in regulations, 28 percent)” after “to 34 percent”.
1986—Subsec. (b)(3). Pub. L. 99–514, § 1810(f)(2), amended par. (3) generally, substituting “interests in corporation not United States real property interests” for “it is not a United States real property holding corporation” in heading, striking out the comma before “if the domestic corporation” in introductory provisions, inserting subpar. (A) designation and adding subpar. (B).
Subsec. (d)(1)(A). Pub. L. 99–514, § 1810(f)(3)(B), substituted “paragraph (2)” for “paragraph (2)(A)”.
Subsec. (d)(1)(B)(i). Pub. L. 99–514, § 1810(f)(3)(A), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “any transferor’s agent, the transferor is a foreign corporation or such agent has actual knowledge that such affidavit is false, or”.
Subsec. (e)(1). Pub. L. 99–514, § 311(b)(4), substituted “34 percent” for “28 percent”.
Pub. L. 99–514, § 1810(f)(4), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “A domestic partnership, the trustee of a domestic trust, or the executor of a domestic estate shall be required to deduct and withhold under subsection (a) a tax equal to 10 percent of any amount of which such partnership, trustee, or executor has custody which is—
“(A) attributable to the disposition of a United States real property interest (as defined in section 897(c), other than a disposition described in paragraph (4) or (5)), and
“(B) either—
“(i) includible in the distributive share of a partner of the partnership who is a foreign person,
“(ii) includible in the income of a beneficiary of the trust or estate who is a foreign person, or
“(iii) includible in the income of a foreign person under the provisions of section 671.”
Subsec. (e)(2). Pub. L. 99–514, § 311(b)(4), substituted “34 percent” for “28 percent”.
Subsec. (e)(3). Pub. L. 99–514, § 1810(f)(5), inserted “The preceding sentence shall not apply if, as of the date of the distribution, interests in such corporation are not United States real property interests by reason of section 897(c)(1)(B).”
Subsec. (e)(4). Pub. L. 99–514, § 1810(f)(6), substituted “section 897” for “section 897(g)”.
Subsec. (e)(6). Pub. L. 99–514, § 1810(f)(8), inserted “and regulations for the application of this subsection in the case of payments through 1 or more entities”.
Statutory Notes and Related Subsidiaries
Effective Date of 2017 Amendment
Amendment by Pub. L. 115–97 applicable to distributions made after Dec. 31, 2017, see section 13001(c)(2) of Pub. L. 115–97, set out as a note under section 11 of this title.
Effective Date of 2015 Amendment
Amendment by section 323(b) of Pub. L. 114–113 applicable to dispositions and distributions after Dec. 18, 2015, see section 323(c) of Pub. L. 114–113, set out as a note under section 897 of this title.
Pub. L. 114–113, div. Q, title III, § 324(c), Dec. 18, 2015, 129 Stat. 3103, provided that: “The amendments made by this section [amending this section] shall apply to dispositions after the date which is 60 days after the date of the enactment of this Act [Dec. 18, 2015].”
Effective Date of 2013 Amendment
Amendment by Pub. L. 112–240 applicable to taxable years beginning after Dec. 31, 2012 and applicable to amounts paid on or after Jan. 1, 2013, see section 102(d) of Pub. L. 112–240, set out as a note under section 1 of this title.
Effective Date of 2008 Amendment
Pub. L. 110–289, div. C, title I, § 3024(d), July 30, 2008, 122 Stat. 2896, provided that: “The amendments made by this section [amending this section] shall apply to dispositions of United States real property interests after the date of the enactment of this Act [July 30, 2008].”
Effective Date of 2006 Amendment
Amendment by section 505(b) of Pub. L. 109–222 applicable to taxable years of qualified investment entities beginning after Dec. 31, 2005, except that no amount shall be required to be withheld under section 1441, 1442, or 1445 of the Internal Revenue Code of 1986 with respect to any distribution before May 17, 2006 if such amount was not otherwise required to be withheld under any such section as in effect before such amendments, see section 505(d) of Pub. L. 109–222, set out as a note under section 852 of this title.
Amendment by section 506(b) of Pub. L. 109–222 applicable to taxable years beginning after Dec. 31, 2005, except that such amendments shall not apply to any distribution, or substitute dividend payment, occurring before the date that is 30 days after May 17, 2006, see section 506(c) of Pub. L. 109–222, set out as a note under section 897 of this title.
Effective Date of 2003 Amendment
Amendment by Pub. L. 108–27 applicable to amounts paid after May 28, 2003, see section 301(d)(2) of Pub. L. 108–27, set out as an Effective and Termination Dates of 2003 Amendment note under section 1 of this title.
Effective Date of 1997 Amendment
Amendment by Pub. L. 105–34 applicable only to amounts paid after Aug. 5, 1997, see section 311(d)(2) of Pub. L. 105–34, set out as a note under section 1 of this title.
Effective Date of 1996 Amendment
Pub. L. 104–188, title I, § 1704(c)(2), Aug. 20, 1996, 110 Stat. 1878, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to distributions after the date of the enactment of this Act [Aug. 20, 1996].”
Effective Date of 1988 Amendment
Pub. L. 100–647, title I, § 1003(b)(3), Nov. 10, 1988, 102 Stat. 3384, provided that the amendment made by that section is effective for taxable years beginning after Dec. 31, 1987.
Effective Date of 1986 Amendment
Amendment by section 311(b)(4) of Pub. L. 99–514 applicable to payments made after Dec. 31, 1986, see section 311(c) of Pub. L. 99–514, as amended, set out as a note under section 593 of this title.
Amendment by section 1810(f)(2), (3), (5), (6), (8) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.
Pub. L. 99–514, title XVIII, § 1810(f)(4)(B), Oct. 22, 1986, 100 Stat. 2827, provided that: “The amendment made by subparagraph (A) [amending this section] shall apply to dispositions after the day 30 days after the date of the enactment of this Act [Oct. 22, 1986].”
Effective Date
Pub. L. 98–369, div. A, title I, § 129(c)(1), July 18, 1984, 98 Stat. 660, provided that: “The amendment made by subsection (a) [enacting this section] shall apply to any disposition on or after January 1, 1985.”
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.