Form Mw506ae - Application For Certificate Of Full Or Partial Exemption - 2013 Page 3
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42013
FORM
INSTRUCTIONS FOR APPLICATION FOR
MW506AE
CERTIFICATE OF FULL OR PARTIAL EXEMPTION
The Comptroller’s decision to issue or deny a certificate and the amount of tax is final and not subject to appeal.
GENERAL INSTRUCTIONS
known. If the property is made up of more
amount.
than one parcel and has more than one
Purpose of Form
Line 3. Transfer is pursuant to an installment
property tax account number, include all
sale under §453 of the Internal
Use
Form
MW506AE
to
apply
for
a
applicable property account ID numbers.
Revenue Code.
Certificate of Full or Partial Exemption
Check the box that describes the transferor/
from the withholding requirements on the
Required documentation: Copy
seller’s acquisition of the property. Check
proceeds of the sale of real property and
of contract of sale or copy of HUD-
the box that describes the transferor/
associated personal property in Maryland
1 settlement sheet from the title
seller’s use of the property at the time of the
by nonresident individuals and nonresident
company; copy of promissory note
current sale, and enter the length of time
entities. A nonresident entity is defined to
to transferor which will be executed
the property has been used for this purpose.
mean an entity that: (1) is not formed under
by transferee at settlement. That
the laws of Maryland and (2) is not qualified
Complete the transferor/seller’s adjusted
portion of the total payment that
by or registered with the Department of
basis section by entering the purchase
the transferor receives at or within
Assessments and Taxation to do business in
price when the transferor/seller acquired
sixty (60) days of settlement must
Maryland.
the property, adding the cost of capital
be stated on the application as the
improvements (including acquisition costs
taxable amount.
Who May File an Application
such as commissions and state transfer
Line 4. Transfer of inherited property is
An individual, fiduciary, C corporation, S
taxes), and subtracting depreciation, if
occurring within 6 months of date of
corporation, limited liability company, or
applicable. If inherited property, use the
death.
partnership transferor/seller may file Form
Date of Death value of the property.
MW506AE. Unless the transferors/sellers are
Required Documentation:
Pro-
Transferee/Buyer’s Information
a husband and wife filing a joint Maryland
vide a copy of the death certificate-
income
tax
return,
a
separate
Form
Enter the name and address.
and a copy of the estimated HUD-1
MW506AE is required for each transferor/
settlement sheet from the title com-
Check the box indicating the transferee/
seller.
pany.
buyer’s entity type.
IMPORTANT:
The
completed
Form
Line 5. Transferor/seller is receiving zero
Attach
schedule
if
there
are
multiple
MW506AE
must
be
received
by
the
proceeds from this transaction.
transferees/buyers.
Comptroller of Maryland no later than 21
Required Documentation: A copy
Reason for Full or Partial Exemption
days before the closing date of the sale
of a letter from the transferor/seller
from Withholding
or transfer to ensure timely receipt of a
to the title company advising they
Certificate of Full or Partial Exemption.
Check the box in the “Reason for Exemption”
are to receive zero proceeds from
column that indicates the reason you are
The Comptroller’s decision to issue
the sale and advising to whom the
requesting a full or partial exemption from
or deny a Certificate of Full or Partial
proceeds are to go; a copy of the
the income tax withholding requirements.
Exemption and the determination of the
acknowledgment letter from the title
amount of tax to be withheld if a partial
company to the transferor/seller.
Specific Line Instructions for Reason
exemption is granted are final and not
for Full or Partial Exemption
Line 6. Transfer is one of the following
subject to appeal.
transactions. Please note the code
Line 1. Transfer is of your principal residence
SPECIFIC INSTRUCTIONS
letter and record it in the box on
as defined in §121 of the Internal
page 2 of Form MW506AE.
Revenue Code, which means it has
Enter the tax year of the transferor/seller if
been your principal residence for
other than a calendar year.
a. Transfer is to a corporation con-
two of the last five years.
trolled by the transferor for purpos-
Transferor/Seller’s Information
es of § 351 of the Internal Revenue
Required Documentation: Copy of
Enter the name, address and identification
Code.
contract of sale or copy of estimated
number (Social Security number or federal
HUD-1 settlement sheet from the
Required documentation: Copy of
employer identification number) of the
title
company;
copy
of
HUD-1
the agreement of sale; Certificate of
transferor/seller applying for the exemption.
settlement
sheet
from
purchase
Good Standing of transferee issued
If
the
transferor/seller
was
issued
an
of property, if claiming settlement
by the state in which transferee is
individual taxpayer identification number
expenses as part of adjusted basis;
incorporated; notarized affidavit ex-
(ITIN) by the IRS, enter the ITIN.
and receipts and invoices for any
ecuted on behalf of transferee by its
Check the box indicating the transferor/
capital
improvements
you
are
President and its Treasurer stating
seller’s entity type.
claiming.
that immediately after the exchange
the transferor(s) will own stock in
Enter
the
transferor/seller’s
ownership
Line 2. Transfer is a tax-free exchange for
the transferee possessing at least
prcentage of the property.
purposes of §1031 of the Internal
eighty percent (80%) of the total
Revenue Code.
Property Information
combined voting power of all classes
Required documentation: Letter
Enter the description of the property,
of transferee’s stock entitled to vote
signed by the qualified intermedi-
including the street address(es) for the
and at least eighty percent (80%)
ary, or by the person authorized to
property as listed with the State Department
of the total number of shares of all
sign on behalf of a business entity
of
Assessments
and
Taxation
(SDAT),
other classes of stock of the trans-
acting as the qualified intermedi-
including county. If the property does not
feree; and an appraisal establishing
ary, which states the name(s) of the
have a street address, provide the full
the fair market value, at the time of
transferor(s), the property descrip-
property account ID numbers used by SDAT
the exchange, of any property other
tion, that the individual or business
to identify the property.
than stock in the transferee which
will be acting as the qualified inter-
is part of the consideration for the
Enter the date of closing for the sale or
mediary for the transferor(s) as part
exchange. The fair market value of
transfer of the property.
of a §1031 exchange of the prop-
any such other property and/or any
erty, whether there will be any boot,
Enter the contract sales price of the property
money which is part of the consid-
and if so, the amount of boot. The
being sold or transferred.
eration for the exchange must be
amount of any boot must be stated
Enter the property account ID number, if
stated on the application as the tax-
on the application as the taxable
COM/RAD-306
12-49
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