Buying in Miami in your own name, through an LLC or through a Colombian company
The conversation about buying an apartment in Miami almost always starts with the price and the expected rent. The decision that moves the most money, however, is a different one: whose name goes on the title.
That decision defines three things at the same time. How much is withheld when you sell. What happens if the owner dies. And how costly it is to change the structure later, which is almost always when people discover they should have thought about it earlier.
First front: the exit
When a foreigner sells real estate in the United States, FIRPTA applies. The buyer is legally required to withhold and remit to the IRS 15% of the sale price under IRC §1445.
That sentence needs to be read carefully. The withholding is on the sale price, not the gain. If the property was bought for 500,000 dollars and sold for 520,000, the withholding is calculated on 520,000, not on the 20,000 profit.
It is not a final tax: it is a withholding, and it is recovered fully or partly when the corresponding return is filed and the actual tax is computed. But meanwhile the money is with the IRS and not in the seller's account, and the refund takes time.
There are two ways to soften the blow. The seller can request a reduction or elimination of the withholding with Form 8288-B, which must be filed before the closing date; the IRS generally responds within 90 days. And there is an exception when the buyer acquires for USD 300,000 or less and states it will be used as a personal residence, provided the buyer or their family plans to live in it at least half the time during the first two years.
The common mistake is not ignorance of FIRPTA. It is finding out the week of closing, when there is no longer time for the 8288-B.
Second front: death
Real estate located in the United States is U.S.-situs property. For a non-resident who is not a citizen, the exemption from federal estate tax is USD 60,000, with a unified credit of USD 13,000 under IRC §2102(b)(1), and above that the rate reaches 40%.
For scale: a U.S. person has an exemption of USD 15,000,000 in 2026. Same schedule, same rates, and an exemption two hundred and fifty times smaller.
Buying in your own name leaves that front completely open.
Why the two fronts contradict each other
Here is the knot, and the reason so many structures end up half done.
Holding the property through a foreign company addresses the estate front, because what the person owns is no longer U.S.-situs real estate but shares of a foreign company. But it complicates the exit front and the treatment of ongoing income, and it usually makes the operation more expensive year after year.
Holding it in your own name keeps the exit simpler and leaves the estate front exposed.
Putting a U.S. LLC in between solves other things, mainly liability and operational order, but depending on how it is set up it may not move the estate front at all, because the analysis looks through the entity.
There is no single answer. There is a right answer for each combination of amount, use of the property, holding period, number of owners and what else that family holds in the United States.
The questions that organize the decision
Is the property for personal use, for rent or to resell within a few years?
How many people will be on the title, and how old are they?
Are there already other U.S.-situs assets in the name of the same people?
How soon is a sale expected, and what liquidity is needed at closing?
Who will handle the structure's annual obligations, if one is created?
The fifth seems minor and it is not. A good part of the problems that reach this firm do not come from a badly designed structure, but from a correct structure that nobody maintained.
At GB Partners this is decided before signing the offer, not after closing. Write to us and we will set up a first thirty-minute conversation.
Informational content only. It is not legal or tax advice and does not create an attorney-client relationship; each case depends on its own facts.
Responsible for this content: Camila Giraldo Bolívar, attorney admitted in New York and Colombia. GB Partners, Calle 5 A # 39-93, oficina 702, Medellín, Colombia. Phone and WhatsApp +57 305 234 6543. www.gbpartnersllc.com
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