FIRPTA withholding on a domestic LLC with foreign members/manager

[Alejandro Riera]

Hi everybody.

I have a question on the tax/legal side here.

Does an LLC created in the United States under the law of the U.S. and the any state, whose managers/members are foreign individuals, is subject to the FIRTPA withholding when selling a U.S. real estate property ?

Having read the IRS 26 U.S. Code § 7701 - Definitions, my understanding is that the answer is NO, but maybe I am wrong.

As the actual rate of withholding is 15% of the sales price, and as the refund (if any) would be "within 90 days", it can be a major setback for my company´s flipping cash-flow because 15% is way higher than the taxable income (and of course than the tax itself), so we would be in the necessity of capital injections to flip the next properties.

If any of you have comments on this, it would be very helpful.

Thanks in advance