Fillable Printable 2015 Form 593-E - Real Estate Withholding
Fillable Printable 2015 Form 593-E - Real Estate Withholding
2015 Form 593-E - Real Estate Withholding
For Privacy Notice, get FTB 1131 ENG/SP.
Real Estate Withholding —
Computation of Estimated Gain or Loss
YEAR
2015
CALIFORNIA FORM
593-E
7151153
Part II – Computation
1 Selling price ...................................................................................................... 1 _______________
2 Selling expenses .................................................................................................... 2 _______________
3 Amount realized. Subtract line 2 from line 1 .............................................................................. 3 _______________
4 Enter the price you paid to purchase the property (If you acquired the property other than by purchase,
see instructions, How to Figure Your Basis.)..............................................................4 _______________
5 Seller or Transferor-paid points......................................................5 _______________
6 Depreciation ....................................................................6 _______________
7 Other decreases to basis ...........................................................7 _______________
8 Total decreases to basis. Add line 5 through line 7 .........................................................8 _______________
9 Subtract line 8 from line 4............................................................................9 _______________
10 Cost of additions and improvements.................................................10 _______________
11 Other increases to basis ..........................................................11 _______________
12 Total increases to basis. Add line 10 and line 11 ..........................................................12 _______________
13 Adjusted basis. Add line 9 and line 12 .................................................................13 _______________
14 Enter any suspended passive activity losses from this property ..............................................14 _______________
15 Add line 13 and line 14 ............................................................................................... 15 ______________
16
Estimated gain or loss on sale. Subtract line 15 from line 3 and enter the amount here. If you have a loss or zero gain, skip lines 17 and 18.
Complete the Seller or Transferor Signature area below and check the box on Form 593-C, Real Estate Withholding Certificate, Part II line 3.
If you have a gain, go to line 17
......................................................................................... 16 ______________
17 Optional gain on sale withholding amount. Check the applicable box for the filing type.
Individual 12.3% Corporation 8.84% Bank and Financial Corporation 10.84%
Non-California Partnership 12.3% S Corporation 13.8% Financial S Corporation 15.8%
Multiply the amount on line 16 by the tax rate for the filing type selected above and enter the result on line 17. This is the optional gain on sale withholding amount.
If you elect the optional gain on sale withholding amount on line 17, get Form 593, Real Estate Withholding Tax Statement, and check the appropriate box on line 4
(Boxes B-G) for the Optional Gain on Sale Election, and transfer the amount on line 17 to Form 593, line 5.
Sign Form 593 to certify the election..................................................................................... 17 ______________
18 Total sales price withholding amount. Multiply the selling price on line 1 by 3
1
/3% (.0333) and enter the amount on line 18.
This is the total sales price withholding amount.
If you select the total sales price withholding amount on line 18, check Box A “3
1
/3% (.0333) x Total Sales Price” on line 4 of
Form 593, and transfer the amount on line 18 to Form 593, line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 ______________
Seller or Transferor Signature
Title and escrow persons and exchange accommodators are not authorized to provide legal or accounting advice for purposes of determining withholding amounts.
Transferors are strongly encouraged to consult with a competent tax professional for this purpose.
Under penalties of perjury, I hereby certify that the information provided above is, to the best of my knowledge, true and correct. If conditions change, I will promptly
inform the withholding agent. I understand that I must retain this form in my records for 5 years and that the Franchise Tax Board may review relevant escrow
documents to ensure withholding compliance. Completing this form does not exempt me from filing a California income or franchise tax return to report this sale.
Seller’s/Transferor’s Name Seller’s/Transferor’s Signature Date
Spouse’s/RDP’s Name (if jointly owned)
Spouse’s/RDP’s Signature (if jointly owned)
Date
(You are required to complete this form if you claim an exemption due to a loss or zero gain or if you elect an optional gain on sale
withholding amount.)
Part I – Seller or Transferor
-
- -
-
-
Form 593-E C2 2014
It is unlawful to forge
a spouse’s/RDP’s
signature.
Name
SSN or ITIN
Spouse’s/RDP’s name (if jointly owned)
Spouse’s/RDP’s SSN or ITIN (if jointly owned
Address (apt./ste., room, PO Box, or PMB no.)
FEIN CA Corp no. CA SOS file no.
City (If you have a foreign address, see instructions.) State ZIP Code
Property address (if no street address, provide parcel number and county)
Form 593-C/Form 593-E Booklet 2014 Page 7
2015 Instructions for Form 593-E
Real Estate Withholding – Computation of Estimated Gain or Loss
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2009, and to the California Revenue and Taxation Code (R&TC).
General Information
In general, for taxable years beginning on or after January 1, 2010, California
law conforms to the Internal Revenue Code (IRC) as of January 1, 2009.
However, there are continuing differences between California and federal
law. When California conforms to federal tax law changes, we do not always
adopt all of the changes made at the federal level. For more information, go
to ftb.ca.gov and search for conformity. Additional information can be found
in FTB Pub. 1001, Supplemental Guidelines to California Adjustments, the
instructions for California Schedule CA (540 or 540NR), and the Business
Entity tax booklets.
Purpose
Use Form 593-E, Real Estate Withholding – Computation of Estimated Gain
or Loss, to estimate the amount of your gain or loss for withholding purposes
and to calculate an optional gain on sale withholding amount. This form is
used for sales closing in 2015.
The seller or transferor completes this form. Title and real estate escrow
persons (REEP) and exchange accommodators are not authorized to
provide legal or accounting advice for purposes of determining withholding
amounts. Sellers or transferors are strongly encouraged to consult with a tax
professional for this purpose.
Optional Gain on Sale Withholding Amount is the withholding amount
calculated when the optional gain on sale election has been made by the
seller or transferor, which includes providing a signature under penalty of
perjury. The seller or transferor makes the election and provides the signature
on Form 593-E. The withholding amount is calculated by multiplying the
seller’s or transferor’s applicable tax rate by the estimated gain determined on
Form 593-E.
You may use estimates when you complete this form, but the estimates must
not result in the calculation of a loss when you actually have a gain. Any seller
or transferor who, for the purpose of avoiding the withholding requirements,
knowingly executes a false certificate is liable for a penalty of $1,000 or 20%
of the required withholding amount, whichever is greater.
This form is signed under penalty of perjury. The seller or transferor must
keep this form for 5 years and provide it to the Franchise Tax Board (FTB)
upon request. However, the seller or transferor is not required to provide this
form to the withholding agent or buyer.
Specific Instructions
Private Mail Box (PMB) – Include the PMB in the address field. Write “PMB”
first, then the box number. Example: 111 Main Street PMB 123.
Foreign Address – Enter the information in the following order: City, Country,
Province/Region, and Postal Code. Follow the country’s practice for entering
the postal code. Do not abbreviate the country’s name.
Part I – Seller or Transferor
Enter the name, tax identification number, and address of the seller or other
transferor.
If the seller or transferor is an individual, enter the social security number
(SSN) or individual taxpayer identification number (ITIN). If the sellers or
transferors are spouses/registered domestic partners (RDPs) and plan to
file a joint return, enter the name and SSN or ITIN for each spouse/RDP.
Otherwise, do not enter information for more than one seller or transferor.
Part II – Computation
Line 1 – Selling Price
The selling price is the total amount you will receive for your property. It
includes money, as well as, all notes, mortgages, or other debts assumed by
the buyer as part of the sale, plus the fair market value of any other property
or any services you receive.
Line 2 – Selling Expenses
Selling expenses include commissions, advertising fees, legal fees, and loan
charges that will be paid by the seller or transferor, such as loan placement
fees or points.
Line 3 – Amount Realized
The amount realized is the selling price minus the selling expenses.
Line 4 – Purchase Price
If you acquired this property by purchase, enter your purchase price. Your
purchase price includes the down payment and any debt you incurred; such
as a first or second mortgage or promissory notes you gave the seller or
transferor in payment for the property. If you acquired the property by gift,
inheritance, exchange, or any way other than purchase, see How to Figure
Your Basis.
Line 5 – Seller or Transferor-Paid Points
Points are charges paid to obtain a loan. They may also be called loan
origination fees, maximum loan charges, loan discount, or discount points.
If the seller or transferor paid points for you when you acquired the property,
enter the amount paid by the seller or transferor on your behalf on line 5,
unless you already subtracted this item to arrive at the amount for line 4.
Line 6 – Depreciation
Enter the amount of depreciation you deducted, or could have deducted,
on your California income tax return for business or investment use of
the property under the method of depreciation you chose. If you took less
depreciation on your tax return than you could have under the method
chosen, you must enter the amount you could have taken under that
method. If you did not take a depreciation deduction, enter the full amount
of depreciation you could have taken. Get federal Publication 946, How to
Depreciate Property, for more information.
If you do not know how much depreciation you deducted or were allowed,
you can make an estimate of the amount of depreciation (for withholding
purposes only). To estimate the depreciation, divide the purchase price plus
the cost of additions and improvements by 27.5 and multiply that by the
number of years you used the property for business use (up to 27.5 years).
Example: Mary bought a house 20 years ago for $150,000 and has used it as
a rental property for the last 18 years. Prior to renting the house, she added a
pool which cost her $25,000. Mary’s depreciation is estimated as follows:
Cost $150,000
Plus additions 25,000
Total 175,000
Divided by 27.5 = 6,364
Multiply by 18 years = $114,552
Mary’s estimated depreciation to enter on line 6 is $114,552.
Line 7 – Other Decreases to Basis
Include any other amounts that decrease your basis, such as:
•
Casualty or theft loss deductions and insurance reimbursements.
• Energy credits claimed for the cost of energy improvements added
to your basis.
• Payments received for granting an easement or right-of-way.
Line 10 – Additions and Improvements
These add to the value of your property, prolong its useful life, or adapt
it to new uses. Examples include room additions, landscaping, new roof,
insulation, new furnace or air conditioner, remodeling, etc. The cost of repairs
may not be included unless they are part of an extensive remodeling or
restoration project. Do not include any additions or improvements on line 10
that were included on line 4.
Line 11 – Other Increases to Basis
Include the amounts paid for any other items that increase the basis of the
property, such as:
•
Settlement fees and closing costs you incurred when you bought the
property.
• The amount you paid for special assessments for items such as water
connections, paving roads, and building ditches.
• The cost of restoring damaged property from a casualty loss, or cost of
extending utility service lines to the property.
Line 14 – Passive Activity Losses
You may only use suspended passive activity losses that directly relate
to the property sold. Other losses such as net operating losses, capital
loss carry-forwards, stock losses, and passive activity losses from other
properties cannot be used.
Page 8 Form 593-C/Form 593-E Booklet 2014
How to Figure Your Basis
The cost or purchase price of property is usually its basis for figuring gain or loss from its sale or other disposition. However, if you acquired the
property by gift, inheritance, exchange, or in some way other than purchase, you must use a basis other than its cost. The following instructions only
reflect the general rules. Exceptions may apply. Get federal Publication 551, Basis of Assets, for more information. Sellers or transferors are strongly
encouraged to consult with a tax professional for this purpose.
How Property Was Received How to Figure Your Basis
Property was received as a gift
Usually, your basis is the donor’s adjusted basis at the time of the gift. Enter the donor’s adjusted
basis on line 4. Then complete the rest of the form (except line 5) with your information after you
received the property.
If the fair market value (FMV) of the property at the time of the gift was less than the donor’s
adjusted basis, get federal Publication 551 to determine your basis.
Property was inherited from
someone other than your
spouse/RDP
Usually, your basis is the FMV at the date of the individual’s death. You can get that valuation from
the probate documents, or if there was no probate, use the appraised value at the date of death.
Enter the FMV on line 4. Then complete the rest of the form (except line 5) with your information
after you received the property.
If you or your spouse/RDP originally gave the property to the decedent within one year of the
decedent’s death, get federal Publication 551 to determine your basis.
You owned the property
(as community property) with
your spouse/RDP who died
Your basis is the FMV of the total property at the date of your spouse’s/RDP’s death. Enter the FMV
on line 4. Then complete the rest of the form (except line 5) with your information after the date of
death.
You owned the property (in joint
tenancy) with your spouse/RDP
who died
Your basis is the sum of: 1) the FMV of your spouse’s/RDP’s half of the property at the date of your
spouse’s/RDP’s death; and, 2) the existing basis of your half of the property at the date of your
spouse’s/RDP’s death. Enter the sum on line 4. Then complete the rest of the form (except line 5)
with your information after the date of death.
Property received from your
spouse/RDP in connection to your
divorce/termination of registered
domestic partnership
Usually, your basis is the same as it would have been without this transfer. Complete Form 593-E as
if you had been the only owner before and after the transfer.
If your spouse/RDP transferred the property to you before July 18, 1984, get federal Publication 551
to determine your basis.
Property received in exchange
for other property
Your basis will depend on whether you received the property in a nontaxable, taxable, or partially
taxable exchange. Get federal Publication 551 to determine your basis. Enter your basis on line 4.
Then complete the rest of the form. However, do not include any amounts on line 5 through line 10
that you included on line 4.
You built the house
(or other improvements)
on the property being sold
Add the purchase price of the land and the cost of the building. Enter the total on line 4 and complete
the rest of the form.
If you deferred the gain from a previous home to this property, get federal Publication 551.
You received the property in a
foreclosure
Enter your basis in the property after the foreclosure on line 4. (You may need to get a tax
professional to help you with this calculation). Then complete the rest of the form (except for line 5)
with your information after the foreclosure.
Line 16 – Estimated Gain or Loss on Sale
If you have a zero gain or loss, check the box on line 3 of Form 593-C, Real
Estate Withholding Certificate. Complete and sign Form 593-C and give
it to your REEP. You will not be subject to withholding on this sale. Keep
Form 593-E for 5 years to document your calculations and provide to the FTB
if requested.
If you have a gain, this is your estimated amount of gain on the sale of your
California property. Go to line 17.
Line 17 – Optional Gain on Sale Withholding Amount
Multiply the amount on line 16 by the tax rate for the filing type selected
and enter the amount on line 17. You may compare this amount to the
withholding amount on the total sales price shown on line 18. If you elect the
optional gain on sale withholding amount on line 17, check the appropriate
box on line 4 (Boxes B-G) for the Optional Gain on Sale Election, on
Form 593, Real Estate Withholding Tax Statement, then transfer the amount
on line 17 to Form 593, line 5. Sign Form 593 to certify the election. Keep
Form 593-E for 5 years to document your calculations and provide to the FTB
upon request.
Line 18 – Total Sales Price Withholding Amount
Multiply the selling price on line 1 by 3
1
/3% (.0333) and enter the amount on
line 18. If you select the standard withholding amount on line 18, check Box A
on line 4 of Form 593, and transfer the amount on line 18 to Form 593, line 5.
