Is an ITIN needed to do a 1031 exchange as a foreign owner?

The certificate application and the return both require a taxpayer identification number

The Form 8288-B instructions say "the U.S. TIN of all parties to the transaction must be on the application," and that a nonresident alien who is not eligible for a Social Security number must apply for an ITIN. Reg. section 1.1445-3(a) is blunter: "In no event, however, will a withholding certificate be issued without the transferor's identifying number."

That certificate matters because a delayed exchange cannot use the seller's notice of nonrecognition, so the application filed by closing is the only way the buyer may hold the 15% rather than remit it; the full rule is on FIRPTA withholding in a 1031.

After closing you file Form 1040-NR with Form 8824. The IRS ITIN guidance for property sellers says a foreign person claiming credit for FIRPTA withholding must use the ITIN on that return and attach the date-stamped Form 8288-A.

You can apply only after the contract is signed, so use the Exception 4 route

The IRS FIRPTA questions say an ITIN application made only because you plan to sell, before a legally binding contract exists, will be denied. As soon as the contract is binding you are eligible under Exception 4, third-party withholding on a disposition of US real property.

On Form W-7 you check reason h, write "Exception 4" beside it, and attach the completed Form 8288-B, mailing the package to the ITIN unit in Austin. The IRS says an ITIN requested together with a withholding certificate application is processed within 10 days of receipt.

Filed on its own, an ITIN takes longer. The Form W-7 instructions tell applicants to allow 7 weeks, or 9 to 11 weeks during January 15 to April 30 or when filing from overseas. Identity documents must be originals or certified copies, and a certifying acceptance agent, available in the United States and abroad, can verify them and return them on the spot.

Closing without a number costs you the certificate and delays your credit

If the IRS rejects the W-7, the attached Form 8288-B is not processed, and the IRS sends both parties Letter 3793 with instructions to reapply. Without a pending application, the buyer must remit the 15% within 20 days of closing, and that money is out of your exchange.

The buyer must still file Forms 8288 and 8288-A without your number, but the Instructions for Form 8288 say "a stamped copy of Form 8288-A will not be provided to the transferor if the transferor's TIN is not included." The IRS instead mails you Letter 3794 asking you to obtain an ITIN before it releases the stamped copy.

Hypothetical calendar: contract to closing in six weeks

A nonresident signs a binding contract on Monday June 1, 2026 to sell a rental for $800,000, closing Wednesday July 15. The dates are hypothetical; confirm yours with your intermediary and tax adviser.

• Wednesday June 3: W-7 under Exception 4, with Form 8288-B attached, goes to the IRS with certified identity documents.
• Mid-June: with the 10-day processing the IRS describes, the ITIN is issued well before closing, and the certificate application is on file before the transfer date.
• Wednesday July 15: the buyer withholds $120,000 and holds it pending the IRS decision; the intermediary receives the rest.
• Had the W-7 been filed alone, 7 weeks would run to Wednesday July 22, after closing, and the 8288-B could not be complete by the transfer date.

Co-owners, spouses and entities each need their own number

Each transferor goes on line 1 of Form 8288-B, so a married couple who are both nonresidents each need an ITIN. A foreign corporation, partnership or LLC uses an EIN, as the form's instructions state.

A foreign buyer of your property needs a TIN too, since the buyer's number goes on the withholding forms; the IRS guidance allows a buyer without one to apply under the same exception. For entity owners, see foreign corporations and LLCs that own US rentals.

A DST subscription will ask for the same number

If part of the proceeds goes into a Delaware statutory trust, the sponsor's subscription documents identify you for tax reporting, and the trust becomes a withholding agent on your share of rent. Have the ITIN in hand before day 45; the other issues are on foreign investors and DSTs and the certificate timing on how long a FIRPTA certificate takes.