Beneficial Owner Reporting under the Corporate Transparency Act

Whose Information is needed?

A beneficial owner is any individual who, directly or indirectly:

  • Exercises substantial control over a reporting company
    • An individual exercises substantial control over a reporting company if the individual meets any of four general criteria: (1) the individual is a senior officer; (2) the individual has authority to appoint or remove certain officers or a majority of directors of the reporting company; (3) the individual is an important decision-maker; or (4) the individual has any other form of substantial control over the reporting company


  • Owns or controls at least 25 percent of the ownership interests of a reporting company.
    • Reporting companies are required to identify all individuals who own or control at least 25 percent of the ownership interests of the company. Any of the following may be an ownership interest: equity, stock, or voting rights; a capital or profit interest; convertible instruments; options or other non-binding privileges to buy or sell any of the foregoing; and any other instrument, contract, or other mechanism used to establish ownership.

NOTE: An individual might be a beneficial owner through substantial control, ownership interests, or both.



Information to be Reported:

Reporting Company

  • Full legal name
  • Any and all trade name or “doing business as” (DBA) names
  • Complete current U.S. address –
    • principal place of business in United States
    • if the reporting company’s principal place of business is not in the United States, the primary location in the United States where the company conducts business.
  • State, Tribal, or foreign jurisdiction of formation
    • For a foreign reporting company only, State or Tribal jurisdiction of first registration
  • Internal Revenue Service (IRS) Employer Identification Number (EIN)
    • If a foreign reporting company has not been issued a TIN, report a tax identification number issued by a foreign jurisdiction and the name of such jurisdiction.

 Each Beneficial Owner and Company Applicant

  • Full legal name
  • Date of birth
  • Complete current address
    • Report the individual’s residential street address
    • Applicants who form or register a company in the course of their business, such as paralegals report the business street address.
  • Unique identifying number and issuing jurisdiction from, and image of, one of the following non-expired documents:
    • S. passport
    • State driver’s license
    • Identification document issued by a state, local government, or tribe
    • If an individual does not have any of the previous documents: foreign passport

NOTE: It may be beneficial for Owners to obtain a FinCEN ID, especially if they are linked to multiple companies.




For more information, consult these sources:



FIRPTA “Tax” Overview

To motivate foreign sellers of real estate to file the required tax returns and to pay applicable income taxes, Congress passed the Foreign Investment in Real Property Tax Act in 1980. This law requires that the buyer withhold (usually through a Title Company or Law Firm) 15% of the amount realized. This amount is then sent to the Internal Revenue Service, where it is credited to the Seller’s account with the Service.

It is important to note that the “FIRPTA-Tax” must only be withheld and paid to the Service if the Seller is a non-resident of the United States. If, for example, the Seller has a permanent resident (“Green”) card or is a U.S. citizen, then no FIRPTA withholding would apply. Title Agents normally prepare “Residency Affidavits” as part of the closing where the Seller swears to the fact that he is a resident of the United States (within the meaning of the tax laws). The title agent is then able to rely on this affidavit unless they have reason to believe it to be false.

In the context of entities (LLC/Inc./LLP etc.), FIRPTA taxes usually do not apply, as long as the entity is considered a domestic entity. It is important to note, however, that if the entity transfers proceeds to the members, shareholders or partners, then the entity will have withholding obligations.

Willful failure to withhold the applicable taxes as well as attempts to circumnavigate the withholding process is a felony and may, upon conviction, be punished by fines and/or a prison term. Even non-willful failure to withhold and pay taxes may result in trust fund recovery penalties being assessed against personnel who may have directed the payments out of the entities and to the recipient.

Disclaimer: This Article is for general information purposes only and does not constitute legal advice.

Automatic Estate Tax Lien

The general rule under the Internal Revenue Code is that non-domiciliaries of the United States must include the full value of jointly held property in their gross estate for estate tax purposes. This hits some parties especially hard, such as those who include their spouse as tenants by the entireties or a family member as a joint tenant with right of survivorship.

There are some exceptions to this general rule. One of these is to prove that the joint party contributed to the purchase. One example would be an unmarried couple who each contributed 50% from their own account towards the purchase price. The important thing here is to preserve proof of these contributions so that the estate can demonstrate this allocation upon the death of one of the owners.

Many time, a tax treaty can impact the application of this general rule as well. It is important to note that relief under a treaty is not automatic. Instead, the estate must file an estate tax return and affirmatively elect the benefits under the treaty.

To Secure the filing of estate tax returns and the payment of estate taxes, the Federal government, by operation of law, receives an automatic estate tax lien upon all property of the decedent upon his or her passing. This lien covers the estate taxes and any applicable interest that may accrue thereon.

This means that the surviving owner of the (previously) jointly held property does not have clear title to the property and cannot convey marketable title without clearing up the estate tax lien.

This can be accomplished by filing an estate tax return and requesting a discharge of the personal representative from personal liability or by filing an Application for Release of a Federal Tax Lien with the IRS Lien Unit.

Disclaimer: This Article is for general information purposes only and does not constitute legal advice.

Estate Taxes for Non-Domiciliaries

It generally is understood that those who are domiciled within the United States or those who are citizens of the United States are subject to U.S. Estate taxes. What is less clear to the layman is what it means to be domiciled within the U.S.

The general definition found in the Treasury Regulations of domicile is a place where a person resides without a present intention of moving therefrom. The question of where a person resides and whether a person has any intention of moving from there is a fact-intensive inquiry that looks at factors like length of time spent in the U.S. and other locations, type of homes owned and where, location of close family and friends, Visa status, location of business interests and so on.

Having established that the domicile of the person is outside the United States, the next inquiry is into which assets fall under the U.S. Estate Tax. The answer depends on whether the person resides in a country that has an estate tax treaty with the United States.

The general rule is that real and tangible personal property located in the United States, along with shares in U.S. companies, U.S. mutual funds and brokerage accounts are subject to the estate tax in the United States.

If the decedent was a domiciliary of a treaty country, the treaty will oftentimes redefine what is taxable. One example is the U.S. – Germany Estate Tax Treaty which provides for examples that corporate stock, bonds, brokerage accounts and most tangible property are not taxable within the United States.

It is important to note that Treaty Benefits are not automatic and must be affirmatively claimed by filing an Estate Tax Return with the appropriate treaty based disclosures.

Disclaimer: This Article is intended for general information purposes only and does not constitute legal advice.

Is the Foreign Power of Attorney Valid in Florida?

Powers of Attorney are helpful in situations where a person become incapacitated or is otherwise unavailable. Oftentimes, visitors to the United States have General Powers of Attorney in their home country and when something unforeseen happens, they are unable to act because the Power of Attorney is not valid under the Florida Statutes and thus rejected by a bank, hospital or Doctor’s office.

It is, therefore, important to make sure that Powers of Attorney follow the rules set out in the Florida Statutes to ensure that the Power of Attorney is valid when it is needed most.

First, while there is no absolute requirement that powers of attorney be written in English to be valid, the Agent must be able to communicate the powers granted by the Power of Attorney if the Agent expects a third party to rely on the document. This may require a translation to be performed to the satisfaction of the third party.

Second, while powers of attorney can be executed overseas, the general rule is that for a power of attorney to be valid in the State of Florida, it must be signed by the principal and 2 witnesses and acknowledged by a notary public. Foreign Civil Law Notaries and some other officials are commonly accepted under Florida Statutes in lieu of a Florida Notary Public.

Lastly, even though the Power of Attorney may permit certain actions to be taken (i.e. Banking Transactions, Medical Decisions, Release of Medical Records etc.) it may sometimes be difficult to persuade a third party to comply under the Power of Attorney because references to certain Florida Statutes (for banking transactions) or Federal Laws (for Medical Information Releases) are missing.

Thus, it is important to make sure that the appropriate formalities are followed to ensure a good experience.

This Article is intended for general information and is not intended to provide legal advice.

Trusts – An Alternative to a Will

A revocable trust is a written document that is very similar in form and function as a Last Will and Testament. However, a Trust has many advantages over a Will. A Trust is very flexible and can be used relatively easily after the Grantor has died by the Successor Trustee to allow the transfer of assets to beneficiaries.

One advantage of a Trust is freedom from compulsory judicial oversight and control. This usually allows the transfer of assets to the ultimate beneficiaries without having to file and then close a probate action in county court. It also allows for properties in multiple counties to be transferred without having to open multiple actions in multiple counties or multiple states. Also, since there is no probate proceeding, the beneficiaries can save on legal and personal representative fees which could total to be as high as 6% of the assets of the estate.

Another benefit is that a trust remains a private document unless the beneficiaries or the trustee feel the need to start an action to enforce one or more terms of the trust against a third party or each other.

Lastly, a Trust is very flexible in that is allows for spendthrift provisions for beneficiaries and can allow for continued trust existence in cases where the beneficiaries have not reached the age of majority or are incapacitated.

This Article is intended for general information and is not intended to provide legal advice.

Taxes on Vacation Homes

Non-Residents who rent their homes on a short-term basis a subject to a number of taxes. These include local and State (Tourist and Sales Taxes, respectively) and Federal Income taxes. It is not always easy to comply with the filing requirements but there is hope. If a realtor accepts payments on behalf of a homeowner, generally, they are liable for the sales and tourist taxes, along with the homeowner. Thus it has become common practice that realtors remit the tourist and sales taxes for all income that flows through their agencies. This is a great service that can cut down on a number of headaches for homeowners.

Additionally, for Federal Income taxes, there are two different types of taxation systems. The general rule is a gross taxation where the rental agent acts as a withholding agent and then pays over 30% of the gross rent to the Internal Revenue Service as a withholding tax. The homeowner then files a tax return where the income is taxed at a flat 30% tax rate. Against such taxes, the homeowner receives credit for the amounts withheld.

The seconds type of taxation system is “net taxation.” With this variation, the homeowner must make an affirmative election to treat the rental income as effectively connected with a US Trade or Business and thus receives the benefit of being able to deduct expenses from the income, taking depreciation deductions and calculating taxes based on graduated tax rates. A further benefit is that at the time of sale, unused expenses that have been carried forward as losses can be deducted from the gain from the sale of the real estate (if any).

In order for a realtor to be excused from withholding the 30% from the gross rent, the property owner must provide a Form W-8ECI to the realtor which must include the owner’s U.S. Taxpayer Identification Number.

Disclaimer: This Article is intended for general information and is not intended and does not provide any legal advice. 

Real Estate Transfer Part 4 – Parties to the Transaction

The question often arises as to who is involved in the consummation of a real estate transfer.

First, there is a realtor who is usually the person who lists the property for sale or who assists in the locating of a suitable property. Realtors are the main point of contact for listings and the first contact for negotiations. It is customary that the buyer and the seller enlist a realtor of their choice as it is not necessary that the buyers contact the actual listing agent of the property in order to facilitate a sale. Mechanisms are in place for the realtors to share the commission (which is usually paid by the seller).

As a trusted professional and agent of their respective party, Realtors oftentimes prepare the documents needed for making of an offer. However, realtors are not able to advise on and make significant modifications to the standard contracts approved by the Board of Realtors and the Florida Bar without the involvement of an attorney.

Next, a title company or an attorney is usually engaged to check the chain of title, prepare specific closing documents (such as a deed) and to provide title insurance for the benefit of the purchaser. If there are significant issues with the title that need to be resolved, title companies oftentimes have to engage the services of an attorney to resolve such issues (i.e. through a quiet title action).

Lastly, an attorney can be brought into the transaction by either party as their advocate in the transaction to represent their interests during contract negotiations (by reviewing contracts in coordination with the realtor) or to review title work to make sure that exceptions drafted by the title company are narrowly focused.

This Article is intended for general information and is not intended to provide legal advice.

Real Estate Transfer Part 3 – FIRPTA Update

To motivate foreign sellers to file the required income tax returns and to pay the appropriate taxes, the United States Congress passed the Foreign Investment in Real Property Tax Act (“FIRPTA”) in 1980. This law has now been substantially changed through the “Protecting American form Tax Hikes Act of 2015” which was signed into law by President Obama in December 2015.

Up to now, the law required that the Buyers of Real Estate (or their Agents, such as a Title Company or Law Office performing the closing) withhold 10% of the amount realized (usually the contract price) and remit same to the Internal Revenue Service. This general rule has now been changed and the withholding percentage has been increased to 15% for any closing that will take place after February 16, 2016.

When the amount realized does not exceed $300,000 and the buyer (or his family) uses the real estate as a residence (as defined in the regulations), there continues to be no requirement to withhold and remit. If the amount realized is between $300,000 and $1,000,000 and the residence requirement is met, then only 10% must be remitted.

Notwithstanding the foregoing, it is still possible to obtain a Withholding Certificate where the seller proves to the IRS that the amounts withheld are substantially higher than the taxes that will ultimately have to be paid. This, however, requires diligence in the application process as there is only a limited time window to accomplish this task.

This Article is not intended to provide legal advice and is intended for general information purposes only. 

Real Estate Transfers Part 2 – Title Insurance

Title Insurance protects against covered title problems that were not discovered during a title search. Such problems can include, among many others, errors and omissions on deeds (i.e. invalid notarizations, inadequate legal descriptions, deeds signed by minors, revoked Power of Attorneys, etc.), mistakes in the records (i.e. gaps in the chain of title, failure to join parties in foreclosures etc.) and forgeries.

There are two types of policies that protect different parties. First, there is the owner’s policy. This policy is usually issued with a policy limit in the amount of the purchase price of the real property. It protects the new owner’s interest in the real estate. The second type of policy is a lender’s policy which protects the lender’s mortgage interest in the real property up to the amount of the outstanding loan.

In Florida, the insurance rates are set by the Division of Insurance and the premiums are usually paid out of the closing proceeds. While the seller generally pays for the owner’s policy in most Florida Counties, there are some significant exceptions where the buyer pays (i.e. Sarasota, Collier, Miami Dade and Broward). The lender’s policy is usually paid by the party taking out the loan (i.e. the buyer). The Lender’s policy costs a mere $25 if it is issued simultaneously with the owner’s policy.

While these allocations are customary, the parties are free to allocate policy premiums amongst themselves as they see fit in the sales contract.

Disclaimer: This Article is for Informational purposes only and is not intended as legal advice.