Tax law might be the most confusing part of the overall real estate process to the average person. No one wants to pay more in taxes than they’re supposed to, but you also want to pay the right amount of taxes so you don’t violate federal internal revenue code. When it comes to real estate investments, few situations are more fraught with potential misunderstanding than transactions with international persons who aren’t familiar with the intricacies of U.S. real estate transactions and tax law. The Foreign Investment in Real Property Tax Act was designed to solve this exact scenario. Known as FIRPTA, this legislation ensures that foreign persons conducting real estate business pay the necessary taxes when selling property. The purpose is to hold all parties accountable to the same laws that govern domestic real estate. The logic is simple: if the property is in the United States, then taxes on that property must be paid, even if the seller is not a resident of the country.