Instructions For Form 593 Draft - Real Estate Withholding Tax Statement - 2016

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2016 Instructions for Form 593
Real Estate Withholding Tax Statement
What's New
If the sellers/transferors are married or RDPs
For installment sales, with the principal portion
and they are entered as one seller/transferor,
of the first installment payment, file a copy of
Penalty Increase – For taxable years beginning
I
we treat them as having equal ownership
Form 593, Form 593-
, Real Estate Withholding
on or after January 1, 2016, the penalties
interest. If the ownership interest is not
Installment Sale Acknowledgement,
related to failure to file information returns
equal, separate Forms 593 need to be filed
Form 593-V, a copy of the promissory
have increased. See General Information F,
for each seller/transferor to represent the
note, and the amount of tax withheld. For
Interest and Penalties, or get FTB Pub. 1150,
correct ownership interest percentage. If
subsequent installment payments, the
Withhhold at Source Penalty Information, for
the information submitted is incorrect, an
buyer/transferee should file a copy of only
more information.
amended Form 593 must be submitted to the
Form 593 and Form 593-V along with the
FTB by the withholding agent.
amount of tax withheld. You do not need to
General Information
obtain the seller's/transferor's signature on
Use Form 593-V, Payment Voucher for Real
each subsequent and completed Form 593.
Do Not Round Cents to Dollars – On this form,
Estate Withholding, to remit real estate
do not round cents to the nearest whole dollar.
withholding payments to the FTB. Form 593-V
Mail forms and payment for the amount of tax
Enter the amounts with dollars and cents as
should be used whether Form(s) 593, is
withheld within 20 days following the end of
actually withheld.
submitted electronically or by mail. The
the month in which the transaction occurred.
withholding agent must use Form 593-V when
Mail to:
Installment Sales – The withholding agent
remitting a payment by check or money order.
is required to report the sale or transfer as
FRANCHISE TAX BOARD
Payments may also be automatically withdrawn
an installment sale (check box B, Installment
PO BOX 942867
from a bank account via an electronic funds
Sale Payment, on Line 3) if the transaction is
SACRAMENTO CA 94267-0651
transfer (EFT).
structured as an installment sale as evidenced
Distribute the other two copies of Form 593
by a promissory note. The withholding agent is
as follows:
B Helpful Hints
required to withhold 3
/
% (.0333) of the first
1
3
• Send one copy to the seller/transferor within
installment payment.
Year of Form – The year at the top of Form 593
20 days following the end of the month in
must be the same as the year on line 2.
Buyers/Transferees are required to withhold
which the transaction occurred.
See instructions for line 2. If you do not
on the principal portion of each subsequent
• One copy will be retained by the withholding
installment payment if the sale of California real
have Form 593 with the correct year, go to
agent for a minimum of five years and must
property is structured as an installment sale.
ftb.ca.gov to get the correct form.
be provided to the FTB upon request.
Withhold on Installment Sale Elect-out
Identification Numbers – Check to see that the
withholding agent’s and seller’s/transferor's
E Amending Form 593
Method – If the seller/transferor elects not
identification numbers are correct and listed
to report the sale on the installment method
An amended Form 593 can only be filed by the
in the same order as the names. If both a
(Internal Revenue Code Section 453[d]), the
withholding agent. If a seller/transferor notices
husband/RDP and wife/RDP are listed, make
seller/transferor must file a California tax return
an error, contact the withholding agent.
sure both social security numbers (SSNs)
and report the entire sale on Schedule D-1,
If you are amending a previously submitted
or individual taxpayer identification numbers
Sale of Business Property. After filing the
Form 593 and need assistance, call the
tax return and reporting the entire gain, the
(ITINs) are listed in the same order as their
Withholding Services and Compliance
seller/transferor must submit a written request
names.
telephone service at: 888.792.4900 or
to the Franchise Tax Board (FTB) to release
Trusts and Trustees – It is important to
916.845.4900.
the buyer/transferee from withholding on the
report the correct name and identification
installment sale payments. Once the request is
To amend a Form 593 previously filed on the
number when title is held in the name of a
received, FTB will issue an approval or denial
correct year form, but reporting incorrect
trust. If the seller/transferor is a trust, see
within 30 days.
information:
the Specific Instructions on page 2, Part II,
Seller/Transferor.
Registered Domestic Partners (RDP) – For
• Complete a new Form 593 with the correct
purposes of California income tax, references
information. Use the same year form as
Preparer’s Name and Title/Escrow Business
to a spouse, husband, or wife also refer to a
originally filed, and check the “Amended”
Name – Provide the preparer’s name and
California RDP, unless otherwise specified.
box on the top left corner of the form.
title/escrow’s business name and phone
When we use the initials RDP they refer to both
• Attach a letter to the back of Form 593
number.
a California registered domestic “partner” and
explaining what changes were made and
a California registered domestic “partnership,”
C Who Must File
why.
as applicable. For more information on
• Do not attach the original Form 593.
Any person (individual, business entity, trust,
RDPs, get FTB Pub. 737, Tax Information for
To amend a Form 593 previously filed using an
or estate) who withheld on the sale/transfer of
Registered Domestic Partners.
incorrect year form:
California real property must file Form 593 to
report the amount withheld. Typically this is a
• Complete a new Form 593 with the
A Purpose
real estate escrow person (REEP). If this is an
withholding information using the correct
Use Form 593, Real Estate Withholding Tax
installment sale payment after escrow closed,
year form. Do not check the “Amended” box
Statement, to report real estate withholding on
then the buyer/transferee is the responsible
on the top left corner of the form.
sales closing in 2016, on installment payments
person.
• Complete a new Form 593 using the same
made in 2016, or on exchanges that were
year form that was originally filed. Check
completed or failed in 2016.
D When and Where to File
the “Amended” box on the top left corner
of the form, and enter $0.00 as the amount
Use a separate Form 593 to report the amount
You need three completed copies of Form 593
withheld on line 5 of the form.
withheld from each seller/transferor. If the
for filing and distribution. File a copy of
• Attach a letter to the back of each Form 593
sellers/transferors are married or RDPs and
Form 593 and Form 593-V, along with the
they plan to file a joint return, include both
explaining what changes were made and
amount of tax withheld and mail to the address
spouses/RDPs on the same Form 593.
why.
shown in this section.
Form 593 Instructions 2015 Page 1

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