Question

Unless a "withholding certificate" is received, certain transactions involving foreign investors require that a portion of the proceeds be withheld and remitted to the IRS. The withholding requirement is imposed:

	1) on sellers only.
	2) on buyers only.
	3) on U.S. citizens (or U.S. companies) only.
	4) only when there is a taxable gain involved.

Answer 1

Option 3 is the correct answer

on U.S. citizens (or U.S. companies) only.

The withholding requirement is imposed on the last U.S. person in the chain who has the obligation to pay a U.S. source income to a foreign person