Claiming a Late FIRPTA Refund: It May Not Be Too Late

Every year, DVC sellers have FIRPTA withholding deducted at closing and never file a tax return to claim the refund. The IRS does not send the money back automatically. It sits, unclaimed, until the three-year refund window closes (after which the IRS keeps it permanently. If you sold DVC in a prior year and never filed, you may still have time to recover thousands of dollars.

How Overpayment Happens

FIRPTA withholding at closing is calculated at 15% of the gross sale price) not 15% of your gain. If you bought your DVC for $18,000 and sold for $24,000, your gain is $6,000 and your actual US tax is $900 (at 15%). But $3,600 was withheld (15% of $24,000). You overpaid by $2,700. That $2,700 is sitting at the IRS waiting for you to file Form 1040-NR to claim it back.

Sellers who sold at a loss overpay by the entire withheld amount (their actual tax is zero.

The Three-Year Refund Window

The IRS gives refund claimants three years from the original filing due date to claim excess withholding. The filing deadline for Form 1040-NR (for non-residents with no US wages) is June 15 of the year following the sale) not April 15. Three years from that date is your hard deadline:

If you sold in 2022 and have not filed: you have until June 15, 2026. After that date, the IRS keeps your withholding. File now.

What You Need to File a Late 1040-NR

• Form 8288-A (your FIRPTA withholding receipt from the closing agent. If you do not have the stamped copy from the IRS, an unstamped copy from the closing agent is acceptable.
• Original purchase documents) your closing statement from when you bought the DVC, showing the purchase price and closing costs (your cost basis).
• Sale closing statement (showing the gross sale price and any selling costs.
• ITIN or SSN) you need a taxpayer identification number. If you never obtained one, you must apply for an ITIN (Form W-7) and attach it to the late return.

How to File a Late Return

1. Prepare Form 8949 reporting the DVC sale (dates, proceeds, basis, gain or loss)
2. Complete Schedule D with the Form 8949 totals
3. Complete Form 1040-NR including the withholding credit from Form 8288-A
4. Write the tax year prominently at the top of each form (e.g., "Tax Year 2022")
5. If applying for an ITIN, attach Form W-7
6. Mail the complete package to the IRS Austin address by trackable international mail

There is no penalty for filing late when you are owed a refund. File as if it were an on-time return (the only difference is that you write the correct tax year at the top of each form.

What If You Cannot Find Your Form 8288-A?

Contact your closing agent) they should have a copy. If the closing agent is no longer operating, contact the title company that handled the transaction. If truly unavailable, a tax professional can request an IRS account transcript for the applicable year that shows the withholding credit on record. The IRS has the payment information even if you cannot locate your copy.

Frequently Asked Questions

Can I still claim my FIRPTA withholding from a 2022 DVC sale?
Yes, if you file before June 15, 2026. After that date, the three-year window closes and the withholding is permanently forfeited. File immediately if you have a 2022 or 2023 unclaimed refund.

Is there a penalty for filing a late 1040-NR to claim a FIRPTA refund?
No. There is no penalty for late filing when the return shows a refund owed. The only consequence of filing late when you are owed a refund is that you receive your money later. And risk missing the three-year window if you wait too long.

What if I cannot find my Form 8288-A from the original closing?
Contact the closing agent for a copy. If unavailable, an IRS account transcript for the applicable year will show the withholding credit on record. A tax professional can request this transcript.