Form 593-I - Real Estate Withholding Installment Sale Agreement (Page 2 of 2) in pdf

Instructions for Form 593-I

Real Estate Withholding Installment Sale Agreement

Purpose

Part IV

By signing this agreement, you are agreeing to:

When an individual sells California real estate on an

• Authorize the escrow officer to withhold only on the

installment basis, the buyer must withhold 3

percent of

down payment,

the total sales price. The buyer must withhold the full

• Withhold 3

percent on all subsequent installment

amount at the time of sale unless the buyer chooses to

payments,

withhold 3

percent of each payment. It is solely the

• Complete Form 597, Real Estate Withholding Tax

buyer's decision whether to withhold on each payment or

Statement , for each payment and send one copy to the

to withhold the full amount at the time of transfer.

Franchise Tax Board with the withholding, and two

If you are the buyer and wish to withhold on each

copies to the seller,

payment, complete Form 593-

and have your escrow

• Send each withholding payment by the 20th day of the

officer send it to the Franchise Tax Board with the

month following the month of the installment payment,

withholding on the down payment and Form 597, Real

and

Estate Withholding Tax Statement . If you do not

• Promptly inform the Franchise Tax Board if the terms

complete a Form 593-

and send it to us, the full 3

of the installment sale, promissory note, or payment

percent of the total sales price is due by the 20th day of

schedule changes.

the month following the month of the close of escrow.

If you sign this agreement, make a copy of this form.

If you are the buyer and you do not wish to withhold on

Make sure you copy the back so you will have the

each payment, then you do not need to complete this

instructions for withholding on subsequent payments.

form. Instruct your escrow officer to withhold the full 3

Give the original, with a copy of the promissory note, to

percent of the total sales price. You will not have a

your escrow officer. When you make subsequent

withholding requirement on subsequent installment

installment payments, withhold 3

percent of the

payments.

payment. You must complete Form 597 for each payment.

When you send the withholding on the final installment

Buyer Instructions

payment, write “Final Installment Payment” on the bottom

Complete all four parts of Form 593-

of Form 597. You can get Form 597 by:

Part I

Internet:

Enter your name as shown on the escrow instructions.

Phone:

(888) 792-4900

Each buyer wishing to withhold on individual payments

Mail:

TAX FORMS REQUEST UNIT

instead of withholding the full amount at the time of sale

FRANCHISE TAX BOARD

must complete a separate Form 593-

. However, if you

PO BOX 307

are purchasing the property with your spouse and both of

RANCHO CORDOVA CA 95741-0307

you will be on the promissory note, then include both of

We update our forms annually, so please make certain

your names, social security numbers, and signatures on

you use the most current form. For more information on

one form. You must include your taxpayer identification

withholding on the installment payments, see the

number (social security number if an individual) for the

instructions for Form 597 or call the Withholding Services

agreement to be valid.

and Compliance Section at (888) 792-4900 (toll-free) or

(916) 845-4900 (not toll-free).

Part II

Enter the seller's name as shown on the escrow

Escrow Officer Instructions

instructions. Use a separate Form 593-

for each seller

If the buyer has agreed to withhold on each payment

included on the promissory note. However, if the sellers

instead of withholding on the full amount at the time of

are husband and wife and both of them will be on the

transfer, withhold 3

percent of the down payment.

promissory note, then include both of their names and

Make a copy of this form for your records. Attach the

social security numbers on one form. The seller's tax

original Form 593-

and the copy of the promissory note

identification number (social security number if an

to Copy A of Form 597, and send to Franchise Tax Board

individual) is required for the agreement to be valid.

with the withholding on the down payment. Refer to the

Form 597 instructions for further information.

Part III

You must attach a copy of the signed note agreement or

promissory note to this form or this agreement will not be

valid.

Form 593-

Instructions (NEW 12-2002)

Form 593-I - Real Estate Withholding Installment Sale Agreement Page 2

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