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CAL FIRPTA 3-1/3 PERCENT WITHHOLDING RULES CHANGEHere is a recent article I came across that could seriosly affect the buying and selling of investment property: CAL FIRPTA 3-1/3 PERCENT WITHHOLDING RULES CHANGE This does not apply to the sale of principal residences or to 1031 tax-deferred exchanges; there are other transfers not subject to the withholding requirements as well. Individual sellers can no longer apply for and receive a waiver from the Franchise Tax Board even if they can document that the tax owed is less than the 3-1/3 percent of the sales price withheld. Entities such as corporations, LLCs and trusts still can apply for and receive a waiver. This law (AB 2065) was enacted without having been available for C.A.R. will be releasing a revised standard form (AS) to reflect this new law next month. It should be noted that it is the escrow's obligation, not the REALTOR'S(R), but many licensees routinely provide the C.A.R. form to their clients. In the interim, the current form AS with a revision date of June 2000 should be used for transactions closing before Dec. 31, 2002. Note: AB 2065 does NOT impose REALTOR(R) The C.A.R. board of directors has asked that C.A.R. work with the A Legal Q&A providing more detail on this law is available at the link below.
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