Real estate withholding statement form 593 is an essential document used in real estate transactions in California. It is specifically designed to report the withholding of state income tax from the sale or transfer of California real property by non-resident individuals, corporations, estates, and trusts. This form ensures compliance with California state tax laws and facilitates the proper reporting of real estate transactions to the Franchise Tax Board (FT). The Real estate withholding statement form 593 requires comprehensive and accurate information to be filled out, including the seller's personal details, such as name, address, and Social Security or taxpayer identification number. Additionally, the form requires the buyer's information, property details, transaction information, and the amount withheld. There are two main types of Real estate withholding statement form 593, known as the Form 593 and the Form 593-C. 1. Form 593: This is the standard Real estate withholding statement form used for most real estate transactions. It is applicable when a withholding of 3.33% of the sales price or transferor's gain is required by law. For example, if a non-resident individual or corporation sells California real property and the total sales price exceeds $1 million, the buyer is required to withhold 3.33% of the sales price and report it using Form 593. 2. Form 593-C: This specific variation of the Real estate withholding statement form is used when an exemption to withholding applies. It is typically used when the seller expects to have no California tax liability or foresees a loss on the sale or transfer of real property. In such cases, the seller can fill out Form 593-C and provide it to the buyer to claim an exemption from withholding. However, the exemption needs to be approved by the FT before the transaction takes place. In conclusion, the Real estate withholding statement form 593 is a crucial document in California real estate transactions, ensuring compliance with state tax laws. It serves as a record of the withholding of state income tax from the sale or transfer of California real property by non-resident individuals, corporations, estates, and trusts. The two main types of this form are Form 593, used for standard withholding, and Form 593-C, used to claim an exemption from withholding when applicable.
Real Estate Withholding Statement Form 593
Description
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FAQ
Any remitter (individual, business entity, trust, estate, or REEP) who withheld on the sale/transfer of California real property must file Form 593 to report the amount withheld. If this is an installment sale payment after escrow closed, the buyer/transferee is the responsible person.
Exemptions: Here are the most common ones that the Seller should be made aware of: If the sales price is $100,000.00 or less, the exemption is automatic, no form needs to be completed. The Seller has owned and used the property as his principal residence at least 2 out of the 5 year period right before the sale.
Form 593 - For electronically filed returns, you must complete the 593 screens, located in the Payments folder within the CA input screens. This is a multi-unit screen and the total amount within the Amount withheld from this seller field must equal the amount reported on line 73 of Form 540, or line 83 of Form 540NR.
In the vast majority of transactions, this is handled by the escrow. If the seller cannot qualify for an exemption, then the buyer must withhold.
To claim the withholding credit, report the sale or transfer as required and enter the amount from line 5 on the withholding line on your tax return, Withholding (Form 592-B and/or 593). Attach one copy of Form(s) 593, to the lower front of your California tax return.