Under FIRPTA, withholding rates are 10% for amounts between $300k and $1M and 15% above $1M. Which statement matches?

• A. 10% for 300k-1M and 15% above 1M
• B. 5% for all transactions
• C. 20% for all transactions
• D. 12% for all transactions

Answer: (A)

Under FIRPTA the withholding on the sale of U.S. real property by a foreign seller follows a tiered rate structure. The standard rule the exam uses is that 10% is withheld on the portion of the sale price between $300,000 and $1,000,000, and 15% is withheld on any amount above $1,000,000. This is the statement that matches, because it reflects the tiered approach rather than a single flat rate. The other options propose constant rates (5%, 20%, or 12%), which do not fit FIRPTA’s tiered withholding structure.