Fillable Form Or-18 - Withholding On Real Property Conveyances printable pdf download

Withholding on Real Property Conveyances

Form OR-18, Form WC, Form TPV-18, and instructions

Introduction

Exemptions

Exempt transferors

Real estate withholding at a glance

Withholding is not required if the transferor is an exempt

Nonresidents who sell Oregon real property are subject to

transferor, such as:

withholding on the gain from the sale. Escrow agents and,

in some cases, attorneys (“authorized agents”) are required

• An individual who is a resident of Oregon (see Deter-

to withhold and remit the funds to the Oregon Department

mining residency status below);

of Revenue to pay for any taxes that may be due. Taxpay-

• A C corporation registered to do business in Oregon;

ers are entitled to receive credit for any withholding on their

• A personal representative, executor, conservator, bank-

Oregon tax returns filed for the year in which the sale was

ruptcy trustee, or other person acting under judicial review;

made. These instructions and forms are designed to inform

• A pass-through entity; or

authorized agents and taxpayers of what is required. Note

• A governmental instrumentality (i.e. city, county, state, or

federal agencies).

that there are exceptions to the withholding requirement

detailed below.

If the authorized agent has information that indicates the

seller is an exempt transferor, the authorized agent is not

Definitions

required to obtain Form WC, Written Affirmation for With-

holding on an Oregon Real Property Conveyance.

The following terms are used in these instructions:

“Authorized agent” is an escrow agent licensed under

Exempt transfers

Oregon Revised Statutes (ORS) 696.505 to 696.590. An attor-

Withholding is not required if:

ney is an authorized agent if there is no licensed escrow

• The consideration (total sales price) for the real property

agent involved and the attorney deposits the proceeds of

is $100,000 or less;

the sale into a client trust account and disburses funds to

• The transferor delivers to the authorized agent a written

the transferor.

assurance as provided in section 6045(e) of the Internal

“BIN” is the Oregon business identification number.

Revenue Code (IRC) that the sale or exchange qualifies

for exclusion of gain as the seller’s principal residence

“Exempt transferor” is a transferor that is:

under IRC section 121;

• A resident of Oregon;

• The conveyance is pursuant to a judicial foreclosure proceed-

• An entity registered to do business in Oregon;

ing, a writ of execution, a nonjudicial foreclosure of a trust

deed, or a nonjudicial forfeiture of a land sale contract; or

• A pass-through entity;

• The conveyance is occurring instead of foreclosure of

• An agency or instrumentality of the United States or the

a mortgage, trust deed sales contract, or other security

State of Oregon; or

instrument, or a land sale contract with no additional

• A city, county, or other municipal or public corporation.

monetary consideration.

“FEIN” is the federal employer identification number.

Principal residence exemption. If the transferor is selling

“Nonexempt transferor” is a transferor that is a nonresi-

a personal residence and the entire gain qualifies for exclu-

sion under federal law, the transferor must provide a written

dent of Oregon, including grantor trusts and single-mem-

assurance to the authorized agent that the entire gain quali-

ber LLCs, or a C corporation that is not registered to do

fies for exclusion under IRC section 121. The transferor does

business in Oregon.

not need to complete Form WC.

“Pass-through entity,” is an entity through which income

If the transferor is selling a personal residence and the entire

and expenses flow to the owners of the entity, such as a

gain is not excludable from federal tax, the transferor must

partnership, S corporation, limited liability company (LLC)

complete Form WC. Situations where the entire gain is not

that is not a disregarded entity, limited liability partnership

excludable include if the taxpayer claimed business use of

(LLP), certain trusts, or estates.

home deductions in the past, or the gain exceeds the federal

exclusion amount.

“Transferee” is a person who acquires ownership of real

property located in Oregon.

Determining residency status

“Transferor” is a property owner who transfers, sells,

deeds, or otherwise conveys their ownership interest in real

Withholding is required when nonresidents sell Oregon

property to another person or entity.

real property (unless the transfer is exempt, see Exempt

150-101-183 (Rev. 10-11)

Form Or-18 - Withholding On Real Property Conveyances

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