In the case of a sale of real property to a foreign person, federal law requires that a buyer of a real estate should withhold funds equal to 10 percent of the sales price in certain types of sales, and send the amount withheld to the Internal Revenue Service (IRS) at the close of escrow.  The federal law is called the Foreign Investment in Real Property Tax Act (FIRPTA).  According to the FIRPTA, a “foreign person is a nonresident alien individual, or a foreign corporation that has not properly made an election to be treated as a domestic corporation, or a foreign partnership, trust, estate or other entity.”