Effective for all California Real Property Closings On or After January 1, 2005

STATUS REQUIREMENT
The TOTAL sales price is $100,000 or less Seller is EXEMPT from withholding. No forms are required.
The property being sold was used as Seller’s principal residence, within the meaning of IRC Section 121, with or without regard to the two year time period. Seller will certify by completing Form No. 593-C and is EXEMPT from withholding.
The property is being sold at a loss for California income tax purposes. Seller will certify by completing Form No. 593-C and is EXEMPT from withholding. Seller will also complete 593-L and retain for 5 years.
The property is being compulsorily or involuntarily converted and Seller intends to acquire property that is similar or related in service or use to qualify for nonrecognition of gain within the meaning of IRC Section 1033. Seller will certify by completing Form No. 593-C and is EXEMPT from withholding.
The relinquished property is part of an IRC Section 1031 exchange and Seller receives no “boot” in excess of $1,500 at closing. Seller will certify by completing Form No. 593-C and is EXEMPT from withholding.
The relinquished property is part of an IRC Section 1031 exchange and Seller receives “boot” in excess of $1500 at closing. Seller will certify by completing Form No. 593-C and 3.33% of total amount of “boot” Seller receives (including the $1,500) will be withheld and forwarded to the Franchise Tax Board along with the Form No. 593-B.
The replacement property is part of an IRC Section 1031 exchange; however Seller receives cash (proceeds) back in excess of $1,500 at the end of the exchange. Seller will certify by completing Form No. 593-C at the close of the Relinquished Property. Withholding will be based on 3.33% of the total amount of “boot” Seller receives (including the $1,500) upon close of the replacement property and will be forwarded by the Qualified Intermediary to the Franchise Tax Board along with Form No. 593-B.
The property is initially part of an IRS Section 1031 exchange; however, the exchange fails and Seller receives all of the proceeds. When the exchange fails, withholding of 3.33% of the sales price will be forwarded by the Qualified Intermediary to the Franchise Tax Board along with a completed Form 593-B.
The property is being sold under an installment sale. The buyer agrees to withhold on each payment instead of withholding the full amount at the time of sale. Seller will certify by completing Form 593-C and Buyer must complete Form 593-I. If the Seller receives a cash down payment, the initial withholding is 3.33% of the down payment. Attach a copy of the note to Form No. 593-I executed by the Buyer and file original 593-I and 593-B with the Franchise Tax Board along with the check for the initial withholding amount. The Buyer must thereafter file Form No. 593-B upon each payment and withhold and pay to the Franchise Tax Board 3.33% of the principal portion of each payment.
The property is being sold as part of an installment sale. The buyer does NOT agree to withhold on each payment. Seller will complete Form 593-C. The full 3.33% of the sale price must be withheld and forwarded to the Franchise Tax Board along with Form No. 593-B.
Proceeds less than 3.33% and none of the above apply. Seller will complete form 593-C and must deposit the shortage. The full 3.33% of the sale price must be withheld and forwarded to the Franchise Tax Board along with Form No. 593-B.
None of the above apply but Seller believes that the actual tax due is less than 3.33% of the sales price. Seller will complete Form 593-C. The full 3.33% of the sales price must be withheld and forwarded to the Franchise Tax Board along with Form No. 593-B.
The property is being transferred due to a foreclosure wherein the transferee is acquiring the property via a trustee’s deed, judicial decree or deed in lieu of foreclosure. Seller is EXEMPT from withholding. No forms are required.
Seller is a corporation (or LLC classified as a corporateion for federal and California income tax purposes) that is either qualified through the California Secretary of State or has a permanent place of business in California. Seller will certify by completing Form No. 593-C and is EXEMPT from withholding.
Seller is a partnership (or LLC that is not disregarded single member LLC and is classified as a partnership for federal and California income tax purposes) with recorded title to the property in the name of the partnership or LLC. Seller will certify by completing Form No. 593-C and is EXEMPT from withholding.
Seller is a tax exempt entity, insurance company, IRA, qualified pension/profit sharing plan or charitable remainder trust. Seller will certify by completing Form No. 593-C and is EXEMPT from withholding.
Seller is a validly formed Bank, acting on its own behalf or as the fiduciary of a trust. Seller will certify by completing Form No. 593-C and is EXEMPT from withholding.
None of the above applies. Seller will complete Form No. 593-C. The full 3.33% of the sales price must be withheld and forwarded to the Franchise Tax Board along with Form No. 593-B.
The above table should not be construed as legal advice concerning the withholding requirements under the California Revenue and Taxation Code. A qualified accountant, attorney, or the Franchise Tax Board should be consulted for advice concerning California withholding requirements.