The short answer
Form 8288-B is the application a foreign seller of US real property, or the buyer, files to ask the IRS for a withholding certificate that reduces or eliminates the withholding that section 1445 otherwise imposes at 15% of the amount realized. A claim that the sale is part of a section 1031 exchange is one of the three grounds the form accepts. In a deferred exchange it protects the withheld money only if it is submitted on or before the date of transfer.
At a glance
| Default withholding | 15% of the amount realized, withheld by the buyer |
|---|---|
| Exchange deadline | Submit on or before the transfer date for a deferred exchange |
| IRS timing | Normally acts within 90 days after it has all needed information |
| While pending | Withholding is not paid over until the 20th day after the IRS mails the certificate or a denial |
The form is the regulation's route to a withholding certificate on three stated grounds.
Form 8288-B is used to apply for a certificate that reduces or eliminates withholding under section 1445, but only on a claim that the seller is entitled to nonrecognition or is exempt, a calculation that the seller's maximum tax liability is less than the amount to be withheld, or the installment sale rules in Rev. Proc. 2000-35. Either the buyer or the seller can file. Every party's US taxpayer identification number must be on it, and a foreign individual without one can file it with Form W-7.
Reg. section 1.1445-3(b)(6) applies this to like-kind exchanges. The application must substantiate the section 1031 requirements, and in a deferred exchange the buyer is excused from paying the withholding within 20 days only if the application is submitted on or before the date of transfer. For a nonrecognition claim on line 7a, the form asks for a description of the transfer, a summary of the law, the supporting facts, evidence of no unsatisfied withholding liability and the property's most recent assessed value.
A worked example shows the withheld money held at closing instead of sent to the IRS.
Hypothetical: a foreign individual sells a Florida rental for $2,000,000 and plans to buy $2,000,000 of replacement property through a qualified intermediary. Section 1445 requires the buyer to withhold $300,000. The seller files Form 8288-B before closing, checks line 7a and notifies the buyer in writing on the day of the transfer that the application is pending.
Because the application was submitted in time, the settlement agent holds the $300,000 rather than remitting it. The form says that money is not due to the IRS until 20 days after the IRS mails the certificate or a denial, and the IRS normally acts within 90 days of a complete file. Agree in writing beforehand that anything released goes to the intermediary, not the seller. Illustrative figures, rounded; have your CPA model your real basis and income.
It bites when the form is late or the exchange is not fully tax-deferred.
A seller's notice of nonrecognition, the faster alternative, is not available for a deferred exchange the buyer cannot confirm as complete when the withholding is due, under Reg. section 1.1445-2(d)(2)(iv). In that case only a timely application and a certificate excuse withholding. If the application is filed after closing, the buyer must remit, and a later certificate can authorize only an early or normal refund.
If the exchange will include boot, the line 7b maximum-tax calculation may fit better than a full nonrecognition claim. The closing mechanics are covered in FIRPTA at closing for foreign exchangers, DST-specific issues in foreign investors and DST 1031 issues, and state withholding in states that withhold at closing.
Related questions
Who files Form 8288-B, the buyer or the seller?
Either can file, and the seller often does because the supporting facts are the seller's. A seller who applies must notify the buyer in writing on or before the day of the transfer.
Does a withholding certificate confirm my exchange qualifies?
No. The form states that a certificate applies only to the withholding obligation under section 1445 and does not decide any other tax issue in the transfer.
Where is Form 8288-B sent?
The current form directs applications to the Internal Revenue Service, P.O. Box 409101, Ogden, UT 84409. An application that is not substantially complete is rejected.
Sources
Checked against these publications on September 30, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.