Get Form 593 B

Who is responsible for withholding? The law holds the buyer (called the transferee) responsible for withholding. In most real estate transactions, the escrow holder transmits the tax to the Franchise Tax Board.

California FIRPTA requires 3 1/3% withholding for "foreign persons" (which includes all non-Californians, including US citizens moving to another State). The required payments are deposits on any tax liability owed. Like payroll tax withholding, this money is not lost; it is a deposit on actual tax owed.

For the State, the law is written such that all real property being sold requires the payment of tax at the close of escrow in an amount equal to 3.33% of the Sales Price.

Any person who withheld on the sale or transfer of California real property during the calendar month must file Form 593 to report, and Form 593-V to remit the amount withheld. Normally, this will be the title company, escrow company, intermediary, or accommodator.

Seller is an LLC classified as a California partnership for federal and California income tax purposes, which is not a single member LLC that is disregarded for federal and California income tax purposes. Seller is a tax-exempt entity.

The law did not change, but the forms changed in 2020, combining the original 4 different forms (593C, 593E, 593I, 593) into one 593 Real Estate Withholding Statement. A copy of the 2020 version of this form can be accessed at this link: https://.ftb.ca.gov/forms/2020/2020-593.pdf .

Purpose. Use Form 593: Certify the seller/transferor qualifies for a full, partial, or no withholding exemption. Estimate the amount of the seller's/transferor's loss or zero gain for withholding purposes and to calculate an alternative withholding calculation amount.

Use Form 592-B to report to the payee the amount of payment or distribution subject to withholding and tax withheld as reported on Form 592, Resident and Nonresident Withholding Statement, Form 592-PTE, or Form 592-F, Foreign Partner or Member Annual Withholding Return.