Instructions For 593-B - Real Estate Withholding Tax Statement printable pdf download

Instructions for 593-B

Real Estate Withholding Tax Statement

Purpose

How to Claim the Withholding

Distribute the other copies of Form 593-B as

follows:

Use this form to report real estate withholding

To claim the withholding credit, report the sale

• Copies B & C – Send to sellers within 20

on sales closing in 2007, on installment

or transfer as required and enter the amount

days following the end of the month in

in Box 7b or Box 8 on the line for real estate

payments made in 2007, or on exchanges

which the transaction occurred.

or nonresident withholding on your tax return.

which were completed or failed in 2007.

• Copy D – Retained by withholding agent.

Attach the Form 593-B, Copy B to the lower

Use a separate Form 593-B to report the

front of your California tax return.

Penalties

amount withheld from each seller. If the sellers

Note: If withholding was done for a failed

are married and they plan to file a joint return,

If the withholding agent does not furnish

include both spouses on the same Form 593-B.

exchange or on boot in the year following the

complete and correct copies of Form 593-B

year the property was sold, the withholding

Common Errors

to the seller by the due date, the penalty is

is shown as a credit for the tax year the

$50 per Form 593-B. If the failure is due to an

Year of Form – The year (upper left corner)

withholding occurred since you qualify for

intentional disregard of the requirement, the

of Form 593-B must be the same as the year

installment sale reporting. If you elect to

penalty is the greater of $100 or 10% of the

in box 2. See instructions for box 2. If you do

report the gain in the year the property was

required withholding.

not have Form 593-B with the correct year, go

sold, instead of in the year you received the

to our Website at to get the

If the withholding agent does not furnish

payment, contact the Franchise Tax Board at

correct form.

complete and correct copies of Form 593-B

(888) 792-4900 prior to filing your California

to the FTB by the due date but does file them

Related Form 93 – Forms 593-B must be

tax return for instructions to have the credit

within 30 days of the due date, the penalty is

sent to the Franchise Tax Board (FTB) with

transferred to the prior year.

$15 per Form 593-B. If Form 593-B is filed

Form 593, Real Estate Withholding Remittance

more than 30 days after the due date, the

Statement.

Specific Instructions

penalty is $50 per Form 593-B. If the failure

Incomplete Information – Be sure to complete

Withholding Agent

is due to an intentional disregard of the

all information.

requirement, the penalty is the greater of $100

Check the box to indicate the type of

Identification Numbers – Check to see

or 10% of the required withholding.

withholding agent (the person actually sending

that the withholding agent’s and seller’s tax

Amending Form 593-B

the withholding to the FTB). Typically, this is

identification numbers are correct and listed

the escrow or title company for regular sales

in the same order as the names. If both a

Note: Do not file an amended Form 593-B

and simultaneous deferred exchanges; the

husband and wife are listed, make sure both

to cancel the withholding amount for a

accommodator or intermediary for non-

social security number (SSN) or individual

Form 593-C filed after the close of escrow.

simultaneous exchanges; and the buyer for

taxpayer identification number (ITIN) are listed

To amend Form 593-B:

installment payments.

in the same order as their names.

• Complete a new Form 593-B with the correct

Enter the name, address, and tax identification

Trusts and Trustees – It is important to report

information.

number of the withholding agent (payer/

the correct name and tax identification number

• Write “Amended” at the top of the revised

sender). Enter the SSN or ITIN only when the

when title is held in the name of a trust. If the

form.

buyer, who is an individual, is sending the

seller is a trust, see the instructions under

• Include a letter explaining what changes

withholding payment.

Seller or Transferor.

were made and why.

Seller or Transferor

Examples – Examples for completing

• Fax the amended form and letter to our

Form 593-B in various situations are on the

general fax number, (916) 845-9512, unless

Enter the name, address, and tax identification

FTB Website at . Search

the amended form was requested by the FTB

number of the seller or transferor. If the seller

Withholding or 93-B Examples.

and a different fax number was provided.

has applied for a tax identification number, but

• Whenever an amended Form 593-B is

it has not been received, enter, “Applied For” in

Who Must File

provided to the FTB, Copies B & C should

the space for the seller’s ID and attach a copy

Any person who withheld on the sale or

also be provided to each affected seller.

of the federal application behind Form 593-B.

transfer of California real property during

Note: Amended forms can only be filed by the

If the seller is an individual, enter the SSN or

the calendar month must file Forms 593 and

withholding agent. If a seller notices an error,

ITIN. If the sellers are husband and wife and

593-B to report and remit the amount withheld.

the seller should contact the withholding agent.

plan to file a joint return, enter the name and

Generally, this will be the title company, escrow

SSN or ITIN for each spouse. Otherwise, do

company, intermediary, or accommodator.

Instructions for Seller

not enter information for more than one seller.

Normally, the buyer will only complete these

Instead, complete a separate Form 593-B for

This withholding of tax does not relieve you

forms when reporting the withholding on

each seller.

from the requirement to file a California tax

installment payments.

If the seller is a revocable trust, enter the

return and report the sale within three months

When and Where to File

grantor’s individual name and SSN or ITIN.

and fifteen days (two months and fifteen

Do not enter the name of the trust. (For tax

File Copy A of Form 593-B with Form 593 and

days for a corporation) after the close of your

pay the amount of tax withheld within 20 days

purposes, the revocable trust is transparent

taxable year.

following the end of the month in which the

and the individual seller must report the sale

You may be assessed penalties if:

transaction occurred.

and claim the withholding on the individual’s

• You do not file a tax return.

tax return). If the trust was a revocable trust

Attach Copy A of Form 593-B to the back of

• You file your tax return late.

that became irrevocable upon the grantor’s

Form 593 and mail with payment to:

• The amount of withholding does not satisfy

death, enter the name of the trust and the

FRANCHISE TAX BOARD

your tax liability.

trust’s federal employer identification number

PO BOX 942867

(FEIN). If the trust has not applied for a FEIN,

SACRAMENTO CA 94267-0651

leave the tax identification number blank.

Form 593-B

2006 Page

Instructions For 593-B - Real Estate Withholding Tax Statement

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