Selling DVC Jointly: FIRPTA for Married Couples

Many DVC contracts are owned jointly by two people, most commonly spouses. When both owners are non-US persons, FIRPTA applies to both of them. Here is what joint ownership means for your withholding, your tax return filing, and your refund.

Both Owners Are Listed on the Withholding Forms

When the closing agent files Form 8288 and Form 8288-A for a jointly-owned DVC contract, both owners are listed. The withholding is split proportionally between the owners (typically 50/50 for married couples unless the contract states otherwise). Each owner gets their own stamped 8288-A showing their share of the withholding.

Separate Tax Returns

Non-resident aliens generally cannot file a joint US tax return the way US residents can. Each owner files their own Form 1040-NR reporting their share of the gain and their share of the withholding. Each owner also needs their own ITIN.

There is one exception: if one spouse is a US person (citizen or green card holder), the US spouse can file a regular US tax return and may be able to include the non-US spouse's income. This is a complex area with multiple options, and a tax professional familiar with non-resident returns should guide the decision.

Coordinating the ITIN Applications

Both spouses who are non-US persons need ITINs. You can apply at the same time, attaching both W-7 applications to a single mailing along with the shared 1040-NR. The IRS processes each W-7 separately, so processing times may differ slightly.

Splitting the Refund

Each spouse's refund is issued separately based on their individual 1040-NR filing. The IRS issues a separate refund check to each filer. Make sure both ITIN applications list the correct individual address, as the checks are mailed to the address on each return.