Fillable Form Or-18 - Withholding On Real Property Conveyances (Page 4 of 6) in pdf

Example 4: Matt sold his rental triplex for $750,000. He pur-

The authorized agent must send the completed Form WC

chased the property 15 years ago for $400,000. He imme-

(or written assurance) to the department within 30 days

diately renovated the property spending an additional

from closing.

$200,000. He has claimed straight-line depreciation on the

property over the last 15 years totaling $327,270 ($21,818 each

Form OR-18 and Form TPV-18

year for 15 years). His Oregon and federal adjusted basis in

Purpose of forms

the rental is $272,730 ($600,000 – $327,270). He had ordinary

selling costs of $50,000. His gain includable in Oregon tax-

If you are an authorized agent, use Form OR-18 to report

able income is $427,270 ($750,000 – $272,730 – $50,000).

the amount of withholding the transferor may claim on the

personal or corporate tax return. Complete Form OR-18 as

Gain that is partially exempt from taxation

part of the closing of the conveyance. Give the top portion

If a transferor conveys property that is partially exempt

of the form showing the amount withheld to the transferor

from taxation, the transferor may reduce the gain includ-

and send the bottom section of the form to the department

able in Oregon taxable income by the exempt amount for

along with the payment of withheld tax. As evidence of the

this purpose.

tax paid on the transferor’s behalf, you may also wish to

keep a copy of the Form OR-18 in your records.

Example 5: Steve, a single individual, sold his personal resi-

dence for $690,000. He purchased the property eight years

Due date of Form OR-18 and Form TPV-18

ago for $225,000. The total gain from the sale of his personal

You must remit withheld tax to the department within 20

residence is $465,000. Under IRC section 121, Steve may

days from the date the proceeds from the conveyance are

exclude $250,000 of the gain from the sale of his personal

disbursed to the transferor. Send the payment with the

residence from taxation. He may reduce the gain includable

payment voucher, Form TPV-18, Payment of Tax Withheld for

in taxable income by the amount excludable on his federal

Nonresidents. We will credit the payment to the appropriate

tax return. The withholding is based on the gain of $215,000

tax year as of the date of the payment.

($465,000 – $250,000).

Example 7: Hanna conveyed her real property on August

Gain recognized using the installment method

15, 2008. The authorized agent completes Form OR-18. We

If a transferor uses the installment method under IRC sec-

will credit Hanna’s tax account with the payment for the

tion 453 to report the gain associated with the conveyance,

third quarter of 2008 as of the date the payment is made.

the transferor reduces the gain used to calculate withhold-

ing. Reduce the gain for the year by the amount that is

Important addresses

deferred. Withholding is only required on the first install-

ment of an installment sale.

Mail Form TPV-18 with payment within 20 days from

disbursal to:

Example 6: Edward sold a large acreage for $1 million. His

Oregon Department of Revenue

total gain on the sale was $500,000. He and the transferee

PO Box 14950

entered into a land-sale contract where the transferee pays

Salem OR 97309-0950

Edward over five years with 50 percent paid in the first year

and the remainder paid evenly each subsequent year. For

Mail Form WC within 30 days from closing to:

tax purposes, Edward recognizes $250,000 of the gain in the

Oregon Department of Revenue

year of the conveyance. He calculates withholding only on

PTAC Compliance

the portion of the gain recognized in the year of conveyance.

955 Center Street NE

Salem OR 97301-2555

Information for authorized agents:

Reporting tax withheld

Taxpayer assistance

Form WC and written assurances

General tax information..........................

Salem .................................................................. 503-378-4988

An authorized agent must obtain a completed Form WC

Toll-free from an Oregon prefix .................... 1-800-356-4222

from the transferor before the transaction closes. If the

transferor refuses to provide a completed Form WC, or

Asistencia en español:

is unable to return it to the agent by the time the agent

Salem .................................................................. 503-378-4988

requires, the authorized agent must withhold 4 percent of

Gratis de prefijo de Oregon ......................... 1-800-356-4222

the sales price or, if less, all of the net proceeds.

TTY (hearing or speech impaired; machine only):

If a transferor completes a written assurance that the gain

Salem .................................................................. 503-945-8617

qualifies for the principal residence exclusion under IRC

Toll-free from an Oregon prefix ..................1-800-886-7204

section 121, that is all that’s required. If the transferor signs

Americans with Disabilities Act (ADA): Call one of the help

the written assurance, the authorized agent must send that

numbers for information in alternative formats.

form to us.

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

Form Or-18 - Withholding On Real Property Conveyances Page 4

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