Real estate withholding law changes - FTB News - nonresidential property - Brief Article

California CPA, Nov, 2002

New withholding requirements recently enacted by the state affect all individuals who sell California real property.

Beginning Jan. 1, escrow companies must withhold 3-1/3 percent of the sales price of any real estate sold that is more than $100,000, not a personal residence, and not a 1031 exchange, 1033 involuntary conversion or a foreclosure.

The only exception to the withholding requirement is if the seller signs under penalty of perjury that there is a loss on the sale.

Unlike current law for nonresident real estate withholding, the FTB cannot allow a reduced amount of withholding based on the true gain (R&TC [ss]18662, as amended by AB 2065, Ch. 02-488).

A Q&A about the changes can be found at www.calcpa.org/members/knowledge/articles/2003realestate.html.> A quick reference guide is at www.calcpa.org/members/knowledge/articles/realestatequickref.html.>

COPYRIGHT 2002 California Society of Certified Public Accountants

COPYRIGHT 2002 Gale Group