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  1. #1

    Default How to Complete California 593-C Real Estate Withholding Certificate, Escrow

    As Successor Trustee, I'm selling my deceased father's residence, and the escrow company can not/will not advise me regarding this required form, which upon selecting proper exemptions, exempts the sale of the home from California withholding. The escrow company gives no direction, and my own tax prep person in Oregon has never filled out a 593-C form. Basically, I need to know if the name entry in Part 1 should be the name of the Trust, or the name of the Successor Trustee. Next, which options in Part ll qualify the sale for exemption. My father used the home as his principal residence. The form refers to IRC Section 121 to define the residence, but I am unable to find information on that. The form also refers to a "two year rule." I don't know what that means. The form is required by the state of California at the time of a real estate sale. Any help, please?

  2. #2
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    Default Re: California 593-C Real Estate Withholding Certificate, Escrow

    Quote Quoting edkrane
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    As Successor Trustee, I'm selling my deceased father's residence, and the escrow company can not/will not advise me regarding this required form, which upon selecting proper exemptions, exempts the sale of the home from California withholding. The escrow company gives no direction, and my own tax prep person in Oregon has never filled out a 593-C form. Basically, I need to know if the name entry in Part 1 should be the name of the Trust, or the name of the Successor Trustee.
    If the property is still in the trust at the time of the sale, then the trust is the owner of the property and the trust then is the seller (transferor). Part I asks for the information of the transferor, so it is the trust information that goes there.

    Quote Quoting edkrane
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    Next, which options in Part ll qualify the sale for exemption. My father used the home as his principal residence. The form refers to IRC Section 121 to define the residence, but I am unable to find information on that. The form also refers to a "two year rule." I don't know what that means.
    The form is asking whether the home was your fatherís principal residence. If this was your fatherís only home and he was living in it at the time he died, then it will qualify as his principal residence for the purpose of the form. If he had more than one residence and split his time between them then he has to determine which of them was his principal residence. The definition of principal residence that the IRS uses for purposes of IRC ß 121 is the following:

    (b) Residenceó(1) In general. Whether property is used by the taxpayer as the taxpayer's residence depends upon all the facts and circumstances. A property used by the taxpayer as the taxpayer's residence may include a houseboat, a house trailer, or the house or apartment that the taxpayer is entitled to occupy as a tenant-stockholder in a cooperative housing corporation (as those terms are defined in section 216(b)(1) and (2)). Property used by the taxpayer as the taxpayer's residence does not include personal property that is not a fixture under local law.

    (2) Principal residence. In the case of a taxpayer using more than one property as a residence, whether property is used by the taxpayer as the taxpayer's principal residence depends upon all the facts and circumstances. If a taxpayer alternates between 2 properties, using each as a residence for successive periods of time, the property that the taxpayer uses a majority of the time during the year ordinarily will be considered the taxpayer's principal residence. In addition to the taxpayer's use of the property, relevant factors in determining a taxpayer's principal residence, include, but are not limited toó
    (i) The taxpayer's place of employment;
    (ii) The principal place of abode of the taxpayer's family members;
    (iii) The address listed on the taxpayer's federal and state tax returns, driver's license, automobile registration, and voter registration card;
    (iv) The taxpayer's mailing address for bills and correspondence;
    (v) The location of the taxpayer's banks; and
    (vi) The location of religious organizations and recreational clubs with which the taxpayer is affiliated.


    Treas. Reg. ß 1.121-1.

    The sale also qualifies for exemption if your father last used the home as his principal residence within the meaning of IRC ß 121 without regard to the 2 year time limit (option 2 of the form). If you donít qualify under option 1 and need more information on this, reply back and Iíll give you more on that.

  3. #3

    Default Re: California 593-C Real Estate Withholding Certificate, Escrow

    The residence was my father's only residence at time of death. He died at home, and had lived there 40+ years. Unsure if Part ll, 1....or 2 applies. Thank you very, very much for your response.

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