Some states impose a withholding requirement on the sale of property by people who are not residents of their state. Often, an exemption is available for §1031 exchanges.
Requirement: 3.33% of the sales price withheld.
Exemption: Submitting Form 593-C (“Real Estate Withholding Exemption Certificate for Individual Sellers”) by certifying they are selling the property as part of a §1031 exchange. Non-resident sellers seeking an exemption must submit Form 593-W (“Withholding Exemption Certificate and Waiver Request for Non-Individual Sellers”) to the California Franchise Tax board.
Information: www.ftb.ca.gov or 800-998-3676
Requirement: 2% of the sales price on property over $100,000.
Exemption: If the seller is performing a §1031 exchange, the non-Colorado resident may sign an “Affirmation of No Reasonably Estimated Tax to be Due” on the Colorado Department of Revenue Form 1083.
Information: C.R.C. 39-22-604.5
Requirement: 5% of the amount realized.
Exemption: Completion of Form N-289 where the seller states they are not required to recognize any gain on the transfer because of Section 1031 exchange.
Information: H.R.S. §235-68
Requirement: 2.5% of the consideration.
Exemption: Submitting Form REW 5 (“Request for Exemption or Reduction in Withholding or Maine Income Tax on the Disposition of Maine Real Property”).
Information: 207-626-8473 M.R.S. Title 36 §5250-A
Requirement: 5% of the amount realized if proceeds exceed $100,000 and the sale is not considered an exchange.
Information: M.R.S. Section 27-7-308
Requirement: 7.7% of the capital gain.
Exemption: Filing Form IT-2663 before closing with the New York State Department of Taxation and Revenue.
Information: N.Y.R.S. Tax Law Article 22, Section 663
Requirement: Exchangers sells an Oregon property and buys outside Oregon, they can defer the Oregon capital gain taxes (9%) until a taxable sale happens.
Information: O.R.S. Chapter 316 and Chapter 317
Requirement: The deferral of capital gain taxes is not available and the gain is subject to a 2.8% gross receipts tax.
Requirement: 6% of the total payment to the seller.
Exemption: Completion of Forms 71.3, Nonresident Election of Gain and Certificate of Withholding Due.
TM 1031 Exchange and Asset Preservation, Inc. do not give tax or legal
advice. The information contained herein should not be relied upon as a
substitute for tax or legal advice obtained from a competent tax and/or
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