Marco’s business digest
TV slots for local Realtors
Local Realtors Stacy Witthoff and Scott Needles, a brother and sister team, are to feature in upcoming episodes of HGTV’s Island Life.
The weekly reality show features “tropical dreamers” who are shown various island properties and followed throughout the process as they search for their piece of paradise.
Witthoff and Needles are in the John R. Wood Marco Island office. Filming completed in August, 2015. Witthoff featured Jan. 24, and Needles appears 10:30 p.m. on Jan. 31.
Fitness program offered at Mackle
A fitness program called Essentrics is being offered Monday and Wednesday at Mackle Park from 9 to 10 a.m. Cost is $10.
PBS fitness personality and author Miranda Esmonde-White developed the program, which has eight workouts that build core strength, lengthen and tone muscle, increase flexibility and speed weight loss. Instructor and Marco resident, Judy Waltz will run the classes through April 27.
Visit Essentricswithjudy.com for more information.
Deal for young readers
In support of a “Literacy Buddy” program, Sunshine Booksellers is offering a 10 percent discount on related book purchases for pre-K children.
The buddy program provides books to young children who are enrolled in an early learning facility served by the Early Learning Coalition of Southwest Florida. Adult volunteers are paired with children, and they “write” to the buddies and tell them of their interests. Buddies merely need to show the letters from the young buddies to receive the discount offered.
Retired educator and school district supervisor Kathleen Reynolds originated the program. Visit elcofswfl.com. Sunshine Booksellers is at 1000 N. Collier Blvd., and also at 677 S. Collier Blvd.
Bank executive to talk on Marco
BMO Harris Bank executive Jack Ablin will speak Tuesday Feb. 23 at the Marco Island Center for the Arts. He is Chief Investment Officer, appears regularly on CNBC and is the author of Reading Minds and Markets. For information on the talk, call the bank at 389-5100.
Florist picks up kudos
Things have come up roses for Marco Island Florist and Gift by being named in the top 5 percent of wedding professionals in the nation. The store now boasts a WeddingWire Couples’ Choice award. The recognition is based on professional achievements for the previous year, and is based on reviews from newlyweds.
The store is rewarded by being highlighted within the WeddingWire network.
Tax change for foreign sellers of US real estate
Foreign sellers of United States real estate are soon to be subject to an increased rate of tax withholding, and Marco attorney Ron Webster has outlined those changes.
They relate to the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA), and
Webster suggests listing agents should familiarize their foreign sellers with the requirements.
Commencing February 16, 2016 any non-resident alien (foreign) seller who sells an interest in U.S. real property will now be subject to withholding 15 percent of the gross sales price. This is an increase from the current rate of 10 percent. The change does not alter the present individual capital gain tax rate for foreigners which ultimately is computed at 20 percent of the net gain subsequently realized upon sale.
However, this change does alter the amount to be held in escrow at closing to 15 percent when an application for reduced withholding is submitted on or before the date of closing. If an application is not made, then the 15 percent of the gross sales price must be remitted to the I.R.S. within twenty days of closing and a U.S. tax return must be filed reporting the sale. Unfortunately, if the latter process is used depending upon what time of the tax year the property is sold, it may take a seller up to 18 months to receive a refund.
Please note, Webster says, the previous 10 percent withholding rate will still apply for those transactions where the sales price is one million or less and the buyer agrees to sign an affidavit stating their intention to use the property primarily for residential purposes during the first two years of ownership. The Buyer must be an individual and cannot be a Corporation, Limited Liability Company or a Partnership. For all other instances the new rate of 15 percent will apply.
New guidelines to remember:
If the sales price is $300,000.00 or less, AND the property will be used by the buyer as a residence (as provided for in the current regulations), and the buyer signs an affidavit affirming this fact, no sums need be withheld or remitted.
If the sales price exceeds $300,000 but does not exceed $1,000,000 AND the buyer signs an affidavit the property will be used by the buyer as a residence (there are no regulations that specifically address these changes but it is understood you can follow the current regulations for the $300,000 exemption), then the withholding rate is lowered from 15 percent to 10 percent of the gross sales price, provided the sale is $1,000,000 or lower.
If the property is vacant land or commercial property or if the amount realized exceeds $1,000,000, then the withholding rate will always be 15 percent on the entire amount, regardless of use by the Buyer.
Antennas should go up if a foreign seller seeks to force the buyer as a condition of closing, to claim the purchase is for residential purposes (if it is not) to lower the withholding rate as the buyer will remain liable for any additional withholding tax, penalties and interest if the I.R.S. challenges the buyer’s intent.
When buyers are purchasing from foreign sellers it is important they understand their purchase just became more complicated as they unwittingly have taken on the burden of being the traffic cop for the I.R.S. If the rules are not strictly complied with the buyer is the party responsible for the penalties.
To minimize the potential tax burden, foreign sellers, now more than ever, should apply for a reduced withholding certificate prior to closing. For more information, call Webster’s office at 394-8999.
Fighting hunger one month at a time
It seems like just yesterday that the Meals of Hope packing event took place at the Marco Island Charter Middle School, but the 2016 effort is already under way.
New president of the project is attorney Bill Morris, and the first monthly fundraising gathering is Feb. 1 at CJ’s on the Bay, from 5 p.m. The fee of $10 covers hors d’oeuvres, entertainment and networking. Money goes towards buying raw food material for the Nov. packaging session. The project is a joint effort of the Marco Island Sunrise and the Noontime Rotary Clubs and the Kiwanis Club of Marco Island.