Form Rew-1-1120 - Real Estate Withholding Return For Transfer Of Real Property - 2012 Page 2
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1
2GENERAL INSTRUCTIONS
PURPOSE OF FORM:
36 MRSA § 5250-A requires a buyer to
c. The consideration for the property is less than $50,000; or,
withhold state income tax when real property located in Maine is
d. Written notifi cation of the withholding requirements has not
acquired from a nonresident of Maine. The buyer must withhold and
been provided to the buyer. The real estate escrow person is
remit to the state tax assessor 2.5% of the consideration received
liable for the withholding tax unless it is shown that the failure
by the transferor (seller) on the transfer. A completed Form REW-
to notify is due to reasonable cause.
1-1120 (for sellers that are corporations), Form REW-1-1040 (for
WITHHOLDING CERTIFICATE ISSUED BY THE STATE TAX
sellers who are individuals or sole proprietors), and/or Form REW-
ASSESSOR:
A withholding certifi cate may be issued by the state
1-1041 (for sellers that are trusts or estates) must accompany the
tax assessor to reduce or eliminate withholding on transfers of
remittance.
Maine real property interests by nonresidents. The certifi cate may
WHO MUST FILE:
A buyer (individual, fi rm, partnership,
be issued if:
association, society, club, corporation, estate, trust, business trust,
1. No tax is due on the gain from the transfer; or,
receiver, assignee or any other group or combination acting as a
2. Reduced withholding is appropriate because the 2.5% amount
unit) of a Maine real property interest who is required to withhold
exceeds the seller’s maximum tax liability.
tax must fi le the appropriate REW-1 forms. If two or more persons
are joint transferees, each must withhold the required amount.
If one of the above is applicable, apply for the certifi cate no later
However, the obligation of each will be met if one of the joint
than fi ve business days prior to closing.
transferees withholds and remits to Maine Revenue Services the
WHEN TO FILE:
A buyer must report and remit the tax withheld
total amount required.
to Maine Revenue Services within 30 days of the date of transfer
If there are multiple sellers, complete a separate REW-1 form for
of the property.
each seller receiving proceeds from the sale. Be sure to complete
WHERE TO FILE:
Send Form REW-1-1120 with payment directly
the appropriate REW-1 form for each seller:
REW-1-1040
to: Maine Revenue Services, Income/Estate Tax Division-REW,
(individuals, sole proprietors), REW-1-1041 (trusts, estates), REW-
P.O. Box 9101, Augusta, ME 04332-9101 (do not send payment or
1-1120 (corporations).
Form REW-1-1120 with the real estate transfer tax form). Provide
EXCEPTIONS:
The buyer is not required to withhold or fi le this
one copy of Form REW-1-1120 to the real estate escrow person,
return if any of the following applies:
one copy to the buyer, and two copies to the seller.
a. The seller furnishes to the buyer written certifi cation stating,
under penalty of perjury, that as of the date of transfer the
seller is a resident of Maine;
b. The seller or the buyer has received from the state tax assessor
a certifi cate of waiver stating that no tax is due on the gain from
the transfer or that the seller has provided adequate security
to cover the liability;
SPECIFIC INSTRUCTIONS
Block 1.
Check the appropriate space to indicate the type of
Block 10.
Enter the date the property was acquired by the seller.
seller.
Block 11.
Check the appropriate space to indicate the amount
Block 2.
Enter the selling entity’s name.
withheld. If the parties obtained a withholding certifi cate
from the state tax assessor authorizing a reduced rate
Block 3.
Enter the federal ID number of the selling entity.
of withholding, enter the certifi cate number and attach a
copy of the certifi cate to this return.
Block 4.
Enter the address of the selling entity.
Block 12.
Enter the dollar amount withheld for the seller in block
Block 5.
Enter name and telephone number of the tax matters
2.
contact person or fi rm.
Block 13.
Enter the name of the withholding agent (buyer).
Block 6.
Enter the date of this transfer.
Block 14.
Enter the address of the withholding agent (buyer).
Block 7.
Enter the total consideration (see 36 MRSA § 5250-
A(1)(A) for defi nition).
Block 15.
Enter the social security number or federal ID number of
the withholding agent (buyer).
Block 8.
Enter the percentage of total proceeds received by this
seller.
Block 9.
Enter the location of the property, including town and
street address. Specify use before the transfer, such
as principal residence, vacation home, condominium,
rental property, commercial, or vacant land.
The seller must attach a copy of the REW-1 form to
the Maine income tax return to ensure proper credit
for real estate withholding paid.
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