Fillable Form Or-18 - Withholding On Real Property Conveyances (Page 2 of 6) in pdf

transfers on page 1). If you are uncertain whether or not

If the LLC is owned by spouses or registered domestic

transferors are Oregon residents, use the criteria below to

partners (RDPs), the LLC is disregarded for tax purposes

help make that determination. If still in doubt, authorized

if the individuals elect to file a joint tax return. In these

agents must obtain a completed Form WC from the trans-

situations, treat the members as individuals and follow the

feror attesting to their residency status.

related instructions.

Grantor Trusts. A grantor trust is not recognized for tax

Who is an Oregon resident?

purposes because the grantor retains substantial control. A

A transferor is a full-year resident of Oregon (even if living

grantor trust is sometimes referred to as a “revocable trust”

outside of Oregon) if all of the following are true:

or a “living trust.” As long as the grantor is living, treat the

• The transferor thinks of Oregon as his or her permanent

trust as an individual and follow the related instructions.

home;

If the grantor is deceased, the trust is irrevocable and with-

• Oregon is the center of the transferor’s financial, social,

holding is not required.

and family life; and

• Oregon is the place the transferor intends to return to

Form WC

when away.

General

The transferor is still an Oregon resident if he or she moves

out of Oregon temporarily or moved back to Oregon after a

A nonexempt transferor must complete Form WC, Writ-

temporary absence.

ten Affirmation for Withholding on an Oregon Real Property

Conveyance. This is true even if a nonexempt transferor is

Who is a nonresident?

engaging in an exempt transfer. Form WC is retained in the

A nonresident is a transferor that maintains his or her

records of the authorized agent for six years from the date

permanent home outside of Oregon all year. Sometimes,

the transaction closed. The authorized agent also sends

Oregon residents are deemed nonresidents if they:

a copy of Form WC and any required attachments to the

department. The transferor should keep a copy of the Form

• Maintained a permanent home outside Oregon the entire

WC provided to the authorized agent.

year; and

• Didn’t keep a home in Oregon during any part of the

Complete the top section of the form for all nonexempt

year; and

transferors that must complete Form WC. Use the following

• Spent less than 31 days in Oregon during the year.

guidelines to determine which box to check in the “Type of

property conveyed” section:

What if the transferor moves into or out of

“Specially assessed” is property that has received a spe-

Oregon during the year?

cial property tax assessment such as a reduced valuation

A transferor who moved into or out of Oregon during the

or deferral.

calendar year is a “part-year resident.” The individual is a

“Rental property” is any real property that is a rental build-

resident for part of the year and a nonresident for part of the

year. A part-year resident may only claim exemption from

ing or structure (including mobile homes) for which rental

withholding if the conveyance occurs and the proceeds are

income is received (commercial, industrial, or residential).

disbursed during the part of the year that the transferor is a

“Undeveloped land” is a parcel of land that is vacant and

resident of Oregon or another exemption applies.

has not been improved for accessibility to utilities nor has

Example 1: Anne moved from Oregon to California on

any structures located upon it.

March 31, 2010. She sold her Oregon rental property on July

“Farm use” is land that is employed in the trade or business

28, 2010. Even though Anne was a resident of Oregon for

of farming for a profit. The land may be zoned for exclusive

the first three months of the year, she was not a resident at

the time of the conveyance so she may not claim exemption

farm use (EFU) but is not required to be.

from withholding as a resident of Oregon.

“Acquired as gift” is property that the seller did not pur-

chase. It could be property that was inherited or simply

Determining nonexempt status

gifted to the seller.

Disregarded entities

When the property is owned by more than one

If a transferor is a limited liability company (LLC) or a

transferor

grantor trust, special rules apply for tax purposes. Some-

times these entities are disregarded for tax purposes. To

To be exempt from the withholding requirement, both

determine if the entity is disregarded for tax purposes use

transferors must meet an exemption separately. If one trans-

the guidelines below:

feror is exempt and the other(s) is not exempt, withholding

is required on the portion of the conveyance attributable to

Limited Liability Companies (LLCs). An LLC owned

entirely by a single member is disregarded for tax purposes.

the nonexempt transferor(s).

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

Form Or-18 - Withholding On Real Property Conveyances Page 2

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