Instructions For Form 593 Draft - Real Estate Withholding Tax Statement

Mail the Form(s) 593 and letter(s) to the

for Resident, Nonresident, and Real Estate

reporting. If you elect to report the gain in the

address indicated under General Information D,

Withholding.

year the property was sold, instead of in the

When and Where to File.

year you received the payment, contact the FTB

For the required file format and record layout

at 888.792.4900 prior to filing your California

Whenever an amended Form 593 is filed with

for electronic filing, get FTB Pub. 1023R, Real

tax return for instructions to have the credit

the FTB, each affected seller/transferor should

Estate Withholding Electronic Submission

transferred to the prior year.

also be provided with a copy.

Requirements. If you are the preparer for more

than one withholding agent, provide a separate

Do not file an amended Form 593 to cancel

Instructions for Withholding Agent

electronic file for each withholding agent. For

the withholding amount for a Form 593-C,

electronic filing submit your payment using

Private Mail Box (PMB) – Include the PMB in

Real Estate Withholding Certificate, filed after

Electronic Funds Transfer (EFT) or Form 593-V.

the address field. Write "PMB" first, then the box

the close of escrow. After escrow has closed,

number. Example: 111 Main Street PMB 123.

amounts withheld may be recovered only by

When remitting payments by EFT, mail a

claiming the withholding as a credit on the

copy of Form 593 to the address in General

Foreign Address – Follow the country’s practice

appropriate year’s tax return. Get Form 593-C

Information D, When and Where to File.

for entering the city, county, province, state,

for more information.

country, and postal code, as applicable, in

Specific Instructions

the appropriate boxes. Do not abbreviate the

F Interest and Penalties

country name.

Instructions for Seller/Transferor

Interest will be assessed on late withholding

Part I – Withholding Agent

payments and is computed from the due

This withholding of tax does not relieve you

date to the date paid. If the REEP does not

from the requirement to file a California income

Enter the business or individual name,

notify the buyer/transferee of the withholding

tax return and report the sale within three

identification number, and address of the party

requirements in writing, the penalty is the

months and fifteen days (two months and

responsible for closing the transaction or any

greater of $500 or 10% of the required

fifteen days for a corporation) after the close of

other party who receives and disburses payment

withholding.

your taxable year.

and remits withholding to the FTB for the sale of

real property.

If after notification, the buyer/transferee or other

You may be assessed penalties if:

withholding agent does not withhold, the penalty

Enter a business name or individual name, not

• You do not file a tax return.

is the greater of $500 or 10% of the required

both. If the party is an escrow company, title

• You file your tax return late.

withholding.

company, exchange company, corporation,

• The amount of withholding does not satisfy

partnership, limited liability company,

If the withholding agent does not furnish

your tax liability.

non-grantor trust, or estate, enter the business

complete and correct copies of Form 593 to the

name and business identification number (FEIN,

seller/transferor by the due date, the penalty

How to Claim the Withholding

CA Corp no., CA SOS file no.). If the business

is $100 per Form 593. If the failure is due to

To claim the withholding credit, report the

name is not applicable, include the individual's

an intentional disregard of the requirement, the

sale/transfer as required and enter the amount

or grantor's first name, initial, last name, and

penalty is the greater of $250 or 10% of the

from line 5 on your California tax return as

identification number (SSN or ITIN).

required withholding.

withholding from Form(s) 592-B or 593. If

We assess a penalty for failure to file complete,

your marital or filing status has changed after

Part II – Seller/Transferor

correct, and timely information returns. The

escrow closed and before filing your California

penalty is calculated per seller:

Enter the individual or business name (if

tax return, please contact us at 888.792.4900

applicable), mailing address, and identification

• $30 if filed 1 to 30 days after the due date.

prior to filing your California tax return for

number of the seller/transferor. If the

• $60 if filed 31 days to 6 months after the due

instructions on how to claim your withholding

seller/transferor has applied for an identification

date.

credit. Claim your withholding credit on one of

number, but it has not been received,

• $100 if filed more than 6 months after the

the following:

enter, “Applied For” in the space for the

due date.

• Form 540, California Resident Income Tax

seller’s/transferor's ID and attach a copy of the

(R&TC Section 19183)

Return

federal application behind Form 593.

If the failure is due to an intentional disregard

• Form 540NR Long, California Nonresident or

If the seller/transferor is a/an:

of the requirement, the penalty is the greater of

Part-Year Resident Income Tax Return

$250 or 10% of the required withholding.

• Form 541, California Fiduciary Income Tax

• Individual, enter the SSN or ITIN.

Return

If the sellers/transferors are

Penalties referenced in this section will be

• Form 100, California Corporation Franchise or

husband/RDP and wife/RDP and plan to

assessed unless it is shown that the failure to

Income Tax Return

file a joint return, enter the name and SSN

notify, withhold, or timely furnish returns was

• Form 100S, California S Corporation

or ITIN for each spouse/RDP. Otherwise,

due to reasonable cause.

Franchise or Income Tax Return

do not enter information for more than one

• Form 100W, California Corporation Franchise

seller/transferor. Instead, complete a separate

G Electronic Filing Requirements

or Income Tax Return – Water’s-Edge Filers

Form 593 for each seller/transferor.

Form 593 information may be filed with the

• Form 109, California Exempt Organization

• Business, enter the business name in the

FTB electronically, using FTB’s Secure Web

Business Income Tax Return

business name field along with the federal

Internet File Transfer (SWIFT), instead of paper.

• Form 565, Partnership Return of Income

employer identification number (FEIN),

However, withholding agents must continue

• Form 568, Limited Liability Company Return

California Corporation number (CA Corp no.),

to provide the seller/transferor with a copy of

of Income

or California Secretary of State (CA SOS) file

paper Form 593.

number.

Attach one copy of Form(s) 593, to the lower

• Grantor trust, enter the grantor’s individual

For installment sales, withholding agents must

front of your California tax return. Make a copy

also mail a completed Form 593-

and a copy

name and SSN or ITIN. Do not enter the

for your records.

of the promissory note to the FTB with the first

name of the grantor trust. The grantor

If withholding was done for a failed exchange

installment payment only.

trust is disregarded for tax purposes and

or on boot in the year following the year the

the individual seller/transferor must report

For electronic filing, submit your file using the

property was sold, the withholding is shown

the sale and claim the withholding on the

SWIFT process as outlined in FTB Pub. 923,

as a credit for the taxable year the withholding

grantor's individual tax return.

Secure Web Internet File Transfer (SWIFT) Guide

occurred since you qualify for installment sale

Page 2 Form 593 Instructions 2015

Instructions For Form 593 Draft - Real Estate Withholding Tax Statement - 2016 Page 2

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