California Real Estate Withholding Booklet

Real Estate Withholding Booklet
2019 Booklet 593 -  Real Estate Withholding Forms Booklet
2019

Real Estate Withholding Forms Booklet

593

California Forms & Instructions
Members of the Franchise Tax Board
Betty T. Yee, Chair
George Runner, Member
Keely Bosler, Member

This booklet contains:
Form 593, Real Estate Withholding Tax Statement
Form 593-C, Real Estate Withholding Certificate
Form 593-E, Real Estate Withholding – Computation of Estimated Gain or Loss
Form 593-I, Real Estate Withholding Installment Sale Acknowledgement
Form 593-V, Payment Voucher for Real Estate Withholding

Table of Contents
General Information .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 2
Real Estate Withholding Forms to Use During Escrow .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 2
Information on Installment Payments That Follow the Close of the Real Estate Transaction .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 2
Form 593, Real Estate Withholding Tax Statement  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5
Instructions for Form 593 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 6
Form 593-C, Real Estate Withholding Certificate .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 11
Instructions for Form 593-C  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 12
Form 593-E, Real Estate Withholding – Computation of Estimated Gain or Loss  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 15
Instructions for Form 593-E  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 16
How to Figure Your Basis .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 17
Form 593-l, Real Estate Withholding Installment Sale Acknowledgement .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 19
Instructions for Form 593-l .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 20
Form 593-V, Payment Voucher for Real Estate Withholding .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 23
Instructions for Form 593-V  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 23
How to Get California Tax Information .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 24
Go to ftb.ca.gov and search for
real estate withholding for:

•	 Forms with Instructions – Find

ONLINE
SERVICES

current real estate withholding forms
and instructions.

•	 Publication 1016, Real Estate

•	 Secure Web Internet File

•	 Webinars – Information on real

Transfer (SWIFT) – File your
information returns electronically.

estate forms.

•	 Subscription Services – Sign

up to receive emails on updated real
estate withholding information.

Withholding Guidelines.

2019 California Real Estate Forms and Instructions

References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and to the California Revenue and Taxation Code (R&TC).

What’s New
Like-Kind Exchanges – The Tax Cuts and Jobs Act (TCJA) amended
Internal Revenue Code (IRC) Section 1031 limiting its application to real
property that is not primarily held for sale. Additionally, under the TCJA,
exchanges of personal property and intangible property do not qualify for
nonrecognition of gain or loss as like-kind exchanges. California does
not conform to the amendments under the TCJA. For California purposes,
IRC 1031 as it existed on January 1, 2015, applies.

General Information
Real Estate Withholding Requirement
Withholding is required when California real estate is sold or
transferred. The real estate escrow person (REEP) is required to notify
buyers of withholding requirements, unless the buyer is a qualified
intermediary (QI) in a deferred exchange. The amount withheld from the
seller or transferor is sent to the Franchise Tax Board (FTB) as required
by R&TC Section 18662.

Purpose
Use the forms and instructions in this booklet for real estate sales
or transfers closing in 2019. For more information about real estate
withholding, get FTB Publication 1016, Real Estate Withholding Guidelines.

Page 2  Real Estate W/H Forms Booklet  2018

Real Estate Withholding Forms to Use During
Escrow
Use the charts on the following page to determine which forms you will
need to use if you are a real estate seller, buyer, QI, or REEP.

Information on Installment Payments That
Follow the Close of the Real Estate Transaction
The buyer must continue to withhold on all installment payments
following the close of the real estate transaction. By the 20th day of the
month following the month of each installment payment:
yy Complete and file a current tax year Form 593 and the required
withholding payment along with Form 593-V.
yy Provide a copy of Form 593 to the seller.

Real Estate Withholding Exclusions
The following are excluded from withholding on real estate transactions:
yy The United States and any of its agencies or instrumentalities.
yy A state, a possession of the United States, the District of Columbia, or
any of its political subdivisions or instrumentalities.

If you are a seller, buyer, REEP, or QI, use this guide to help you get started on California real estate withholding during escrow. For more
details, see the individual forms with instructions and FTB Pub.1016.

Form

Title and Purpose

Required Action

Real Estate Withholding Certificate

	

If you qualify for an exemption, complete, sign, and return
Form 593-C to your REEP before the close of the real estate
transaction.

	

If you calculate a loss or zero gain on the sale, you can claim an
exemption from withholding using Form 593-C. (See Required
Action for Form 593-C.)

	

If you calculate a gain on the sale, you may elect to use the
optional gain on sale withholding calculation instead of the total
sales price method. This election requires a certified Form 593.

	

Sign and keep a copy of Form 593-E for 5 years.

Real Estate Withholding Tax Statement

	

593

Report your withholding on the real estate
sale, or certify you are using the optional
gain on sale withholding calculation method.

If you do not qualify for an exemption, withholding is required.
You must complete the seller information on Form 593 and
provide it to your REEP.

	

If you elect to use the optional gain on sale withholding
calculation method:
	
1. 	 Notify the REEP of the withholding amount.
	
2. 	 Sign Form 593.

Form

Title and Purpose

Required Action

Real Estate Withholding Installment Sale
Acknowledgment

	

593-C

Certify that you qualify for a full or partial
exemption from real estate withholding.

Buyer

Seller

Real Estate Withholding – Computation of
Estimated Gain or Loss

593-E

If you enter into an installment agreement with the seller,
complete and sign Form 593-I and return it to the REEP. Include a
copy of the promissory note.

593-I

Disclose the terms of the installment sale
	
transaction and acknowledge you will
withhold on each future installment payment.

Form

Title and Purpose

Required Action

Real Estate Withholding Certificate

	

Verify you received a completed, signed Form 593-C before the
close of the real estate transaction.

	

Keep a copy of Form 593-C for 5 years.

Real Estate Withholding Tax Statement

	

Report withholding on real estate sales or
transfers.

Verify Form 593 is signed if the seller elects the optional gain on
sale withholding calculation method.

	

Submit Form 593, Form 593-V, and Form 593-I with a copy of the
promissory note (if applicable) to FTB within 20 days following
the end of the month in which payment is received.

	

Provide the seller with a copy of the completed Form 593 within
20 days following the end of the month the real estate transaction
closes or an installment payment is made.

	

Keep a copy of all real estate withholding forms for 5 years.

593-C

QI/REEP/Buyer

Calculate whether you have a gain, loss, or
zero gain on the real estate sale.

593

593-V

593-I

Verify the seller is exempt from withholding.

Payment Voucher for Real Estate
Withholding
Remit withholding payments on real estate
sales or transfers.
Real Estate Withholding Installment Sale
Acknowledgment

Keep a copy of Form 593-I. You need the information to complete
withholding on future installment payments.

Report an installment sale (if applicable).
Go to ftb.ca.gov/forms to get the forms referenced above. For questions about California real estate withholding, contact Withholding
Services and Compliance at 888.792.4900 or 916.845.4900.

Real Estate W/H Forms Booklet  2018  Page 3

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Visit our website:

ftb.ca.gov

Page 4  Real Estate W/H Forms Booklet 2018

TAXABLE YEAR

2019

CALIFORNIA FORM

Real Estate Withholding Tax Statement

593

AMENDED:  I 
Part I  Withholding Agent Information
 SSN or ITIN   FEIN   CA Corp no.   CA SOS file no.

Business name
First name

Initial Last name

Address (apt./ste., room, PO box, or PMB no.)
City (If you have a foreign address, see instructions.)

State

ZIP code

-

Part II  Seller/Transferor Information (If a trust, see instructions for Part II.)
First name

Initial Last name

SSN or ITIN

Spouse’s/RDP’s first name

Initial Last name

Spouse’s/RDP’s SSN or ITIN

-

-

 FEIN    CA Corp no.   CA SOS file no.

Business name (if applicable)
Address (apt./ste., room, PO box, or PMB no.)
City (If you have a foreign address, see instructions.)

State

ZIP code

-

Property address (If no street address, provide parcel number and county.)

Part III  Escrow or Exchange Information
1.  Escrow or Exchange Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

I 1	

2.  Date of Transfer, Exchange Completion, Failed Exchange, or Installment Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
3.  Type of Transaction (Check One Only): 
	 A    Conventional Sale/Transfer	
	 B    Installment Sale Payment	

I

I2

(mm/dd/yyyy)

C	   Boot
D	   Failed Exchange

I

4.  Withholding Calculation (Check One Only): 
	 Total Sales Price Method (Seller/Transferor signature not required below. See instructions.)
	 A	   31/3% (.0333) x Total Sales Price, Boot, or Installment Sale Payment
	
	
	
	

Optional Gain on Sale Election (Seller/Transferor signature required below. See instructions.)
B	   Individual 12.3% x Gain on Sale	
E	   Bank and Financial Corp. 10.84% x Gain on Sale
C	   Non-California Partnership 12.3% x Gain on Sale	
F	   S Corporation 13.8% x Gain on Sale
D	   Corporation 8.84% x Gain on Sale	
G	  Financial S Corporation 15.8% x Gain on Sale

5.  Amount Withheld from this Seller/Transferor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

,

,

.

Seller/Transferor Signature – Signature is required only when the Optional Gain on Sale is elected above.
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.
To learn about your privacy rights, how we may use your information, and the consequences for not providing the requested information, go to ftb.ca.gov/forms and search
for 1131. To request this notice by mail, call 800.852.5711.
Under penalties of perjury, I declare that I have examined this form, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true,
correct, and complete. Declaration of preparer (other than remitter) is based on all information of which preparer has any knowledge.

Sign Here
It is unlawful to forge
a spouse’s/RDP’s
signature.

Your signature

Spouse's/RDP's signature

X

X

Preparer’s name and Title/Escrow business name

Date
Telephone Number

(	)

7111193

Form 593  2018

2019 Instructions for Form 593
Real Estate Withholding Tax Statement

General Information

A	Purpose

C	 Who Must File

Real Estate Escrow Person (REEP) – REEP
is anyone involved in closing the real estate
transaction, which includes any attorney,
escrow company, title company, Qualified
Intermediary (QI), or anyone else who receives
and disburses payment for the sale or transfer
of real property.
Installment Sales – The REEP reports the sale
or transfer as an installment sale if there will
be at least one payment made after the tax year
of the sale. The withholding is 31/3% (.0333)
of the down payment during escrow.
Buyers/Transferees are required to withhold
on the principal portion of all payments
made following the close of the real estate
transaction, unless an approval letter for electout method is received as described below.
Elect Out of Subsequent Installment Payment
Withholding – Sellers or transferors can
elect to not report the sale on the installment
method. If the seller/transferor chooses
not to use the installment method, the
seller/transferor generally reports the entire
gain in the year of sale, even though the
seller/transferor does not receive all the
sale proceeds in that year. To do this, the
seller/transferor must:
•	 File a California income tax return and
report the entire gain on Schedule D,
California Capital Gain or Loss Adjustment,
or D-1, Sale of Business Property.
•	 Submit to the Franchise Tax Board
(FTB) a written request to release the
buyer/transferee from withholding on
subsequent installment payments after
filing the income tax return and reporting
the entire gain.
The FTB will approve or deny the request
within 30 days from when received. The
buyer must continue to withhold until the
FTB approves the request.
For more information, get FTB 4010,
Withholding on California Real Estate
Installment Sales, or go to ftb.ca.gov and
search for installment sales.
Registered Domestic Partners (RDP) – For
purposes of California income tax, references
to a spouse, husband, or wife also refer to a
California RDP, unless otherwise specified.
When we use the initials RDP they refer to both
a California registered domestic “partner” and
a California registered domestic “partnership,”
as applicable. For more information on
RDPs, get FTB Pub. 737, Tax Information for
Registered Domestic Partners.
Penalty Increase – Beginning on or after
January 1, 2016, the penalties related to failure
to file information returns increased. See
General Information G, Interest and Penalties,
or get FTB 1150, Withhold at Source Penalty
Information, for more information.

Use Form 593, Real Estate Withholding Tax
Statement, to report real estate withholding on
sales closing in 2019, installment payments
made in 2019, or exchanges that were
completed or failed in 2019.
Use a separate Form 593 to report the amount
withheld from each seller/transferor. If the
sellers/transferors are married or RDPs and
they plan to file a joint return, include both
spouses/RDPs on the same Form 593.
If the sellers/transferors are married
or RDPs and they are entered as one
seller/transferor, we treat them as having
equal ownership interest. If the ownership
interest is not equal, file separate Forms 593
for each seller/transferor to represent the
correct ownership interest percentage. If
the information submitted is incorrect, an
amended Form 593 must be submitted. See
General Information F, Amending Form 593, for
more information.
Use Form 593-V, Payment Voucher for Real
Estate Withholding, to remit real estate
withholding payments to the FTB. Submit
Form 593-V when Form(s) 593 is submitted
electronically or by mail. The REEP must use
Form 593-V when remitting a payment by
check or money order.

Anyone (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, then the buyer/transferee is the
responsible person.

Page 6   Real Estate W/H Forms Booklet 2018

B	 Helpful Hints
Taxable Year – The taxable year at the top
of Form 593 must match the taxable year
on line 2. See instructions for line 2. We
cannot process a Form 593 with an incorrect
taxable year. To avoid processing delays, go to
ftb.ca.gov/forms to get the correct taxable year
Form 593.
Identification Numbers – Check to see that
the REEP and seller’s/transferor's identification
numbers are correct and listed in the same
order as the names. If both a husband/RDP
and wife/RDP are listed, make sure both social
security numbers (SSNs) or individual taxpayer
identification numbers (ITINs) are listed in the
same order as their names.
Trusts and Trustees – It is important to
report the correct name and identification
number when title is held in the name of
a trust. If the seller/transferor is a trust,
see the Specific Instructions for Part II,
Seller/Transferor Information.
Preparer’s Name and Title/Escrow Business
Name – Provide the preparer’s name and
title/escrow’s business name and phone
number.

D	 When and Where to File
You will need the original completed Form 593
and two copies:
•	 File the original Form 593, along with
completed Form 593-V and the withholding
payment. Mail to the address shown in this
section.
•	 Provide one copy to the seller/transferor
within 20 days following the end of the
month in which the transaction closed.
•	 Retain one copy for the REEP's records for
a minimum of five years. Provide to the FTB
upon request.
For installment sales, submit the following at
the close of the real estate transaction:
•	 Form 593.
•	 Form 593-I, Real Estate Withholding
Installment Sale Acknowledgement.
•	 Form 593-V with the amount withheld on
the down payment.
•	 A copy of the promissory note.
When making installment payments following
the close of the real estate transaction,
withhold either 31/3% (.0333) of the total sales
price, or the Optional Gain on Sale withholding
percentage on the principle portion of each
installment payment, as specified by the
seller/transferor on Form 593.
File only a completed current year Form 593
and Form 593-V with each withholding
payment.
For example, if you withhold on a payment
to a seller on June 1, 2019, then use a 2019
Form 593 and Form 593-V.
Form 593-I, a copy of the promissory note,
and the seller’s/transferor’s signature are not
required.
Mail to:
	 WITHHOLDING SERVICES AND
COMPLIANCE MS F182
	 FRANCHISE TAX BOARD
PO BOX 942867
SACRAMENTO CA 94267-0651

E	

Electronic Filing
Requirements

Form 593 information may be filed with the FTB
electronically, using FTB’s Secure Web Internet
File Transfer (SWIFT). However, the REEP must
provide the seller/transferor with a copy of
Form 593.
For installment sales, the REEP must also
mail a completed Form 593-I and a copy of
the promissory note to the FTB with the down
payment only.
For electronic filing, submit your file using the
SWIFT process as outlined in FTB Pub. 923,
Secure Web Internet File Transfer (SWIFT) Guide
for Resident, Nonresident, and Real Estate
Withholding.
For the required file format and record layout
for electronic filing, get FTB Pub. 1023R, Real
Estate Withholding Electronic Submission
Requirements. If you are the preparer for more
than one REEP, provide a separate electronic file
for each REEP. For electronic filing of Form 593,
mail your payment along with Form 593-V.
Electronic signatures shall be considered as
valid as the originals.

F	

Amending Form 593

If an error is discovered after the withholding
agent files Form 593, then the REEP files an
amended Form 593 to correct the error. An
amended Form 593 can only be filed by the
REEP. If a seller/transferor notices an error, then
they contact the REEP.
Important: For assistance to correct error(s),
prepare, and file amended forms, call
Withholding Services and Compliance at
888.792.4900 or 916.845.4900.
If you previously filed with a correct taxable year
form, but reported incorrect information, then
follow the steps below:
1.	 Complete a new Form 593 with the same
taxable year form as originally filed.
•	 Check the “Amended” box at the top left
corner of the form.
•	 Enter all the correct withholding and
seller/transferor information. Do not
enter negative numbers.
•	 Attach a letter to the back of the form to
explain your reasons for the corrections.
•	 Keep the original Form 593 for your
records.
2.	 Mail the amended form and attached
letter to the address shown under General
Information D, When and Where to File.
To amend a Form 593 previously filed using an
incorrect year form, call us for assistance.
Whenever an amended Form 593 is filed with
the FTB, provide a copy to the seller/transferor.
Do not file an amended Form 593 to cancel
the withholding amount for a Form 593‑C,
Real Estate Withholding Certificate, filed after
the close of the real estate transaction. After

escrow has closed, amounts withheld may be
recovered only by claiming the withholding as a
credit on the appropriate year’s tax return. Get
Form 593-C for more information.

G	 Interest and Penalties
Interest will be assessed on late withholding
payments and is computed from the due date
to the date paid. If the REEP does not notify
the buyer/transferee, other than a QI, of the
withholding requirements in writing, the penalty
is the greater of $500 or 10% of the required
withholding.
If after notification, the buyer/transferee, unless
the buyer is a QI in a deferred exchange, does
not withhold, the penalty is the greater of $500
or 10% of the required withholding.
If the REEP does not furnish complete
and correct copies of Form 593 to the
seller/transferor by the due date, the penalty
is $100 per Form 593. If the failure is due to
an intentional disregard of the requirement, the
penalty is the greater of $250 or 10% of the
required withholding.
We assess a penalty for failure to file complete,
correct, and timely information returns. The
penalty is calculated per seller:
•	 $30 if filed 1 to 30 days after the due date.
•	 $60 if filed 31 days to 6 months after the due
date.
•	 $100 if filed more than 6 months after the
due date.
(R&TC Section 19183)
If the failure is due to an intentional disregard
of the requirement, the penalty is the greater of
$250 or 10% of the required withholding.
For more information, get FTB 1150.
Penalties referenced in this section will be
assessed unless it is shown that the failure to
notify, withhold, or timely furnish returns was
due to reasonable cause.

Specific Instructions
Instructions for Seller/Transferor
This withholding of tax does not relieve you of
the requirement to file a California income tax
return and report the sale.
You may be assessed penalties if:
•	 You do not file a tax return.
•	 You file your tax return late.
•	 The amount of withholding does not satisfy
your tax liability.

How to Claim the Withholding
To claim the withholding credit you must file a
California tax return. Report the sale or transfer
as required. Enter the amount from Form
593, line 5, Amount Withheld from this
Seller/Transferor, on your California tax return
as withholding from Form(s) 592‑B , Resident
and Nonresident Withholding Tax Statement, or
593. If your filing status changed after escrow

closed and before filing your California tax
return, please call Withholding Services and
Compliance at 888.792.4900 or 916.845.4900
prior to filing your tax return for instructions
on how to claim your withholding credit. Claim
your withholding credit on one of the following:
•	 Form 540, California Resident Income Tax
Return
•	 Form 540NR Long, California Nonresident or
Part-Year Resident Income Tax Return
•	 Form 541, California Fiduciary Income Tax
Return
•	 Form 100, California Corporation Franchise
or Income Tax Return
•	 Form 100S, California S Corporation
Franchise or Income Tax Return
•	 Form 100W, California Corporation Franchise
or Income Tax Return – Water’s-Edge Filers
•	 Form 109, California Exempt Organization
Business Income Tax Return
•	 Form 565, Partnership Return of Income
•	 Form 568, Limited Liability Company Return
of Income
Attach one copy of Form(s) 593 to the lower
front of your California tax return. Make a copy
for your records.
If withholding was done for a failed exchange
or on boot in the year following the year the
property was sold, the withholding is shown
as a credit for the taxable year the withholding
occurred since you qualify for installment
sale reporting. If you elect to report the gain
in the year the property was sold, instead of
in the year you received the payment, contact
Withholding Services and Compliance at
888.792.4900 or 916.845.4900 prior to filing
your California tax return for instructions to
have the credit transferred to the prior year.

Instructions for Withholding
Agent
Taxable Year – The taxable year at the top of
Form 593 must match the taxable year on line 2.
See instructions for line 2. We cannot process
a Form 593 with an incorrect taxable year. To
avoid processing delays, go to ftb.ca.gov/forms
to get the correct taxable year Form 593.
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 – Follow the country’s practice
for entering the city, county, province, state,
country, and postal code, as applicable, in
the appropriate boxes. Do not abbreviate the
country name.

Part I – Withholding Agent
Information
Enter the business or individual name,
identification number, and address of the party
responsible for closing the transaction or any
other party who receives and disburses payment
and remits withholding to the FTB for the sale of
real property.

Real Estate W/H Forms Booklet 2018  Page 7

Enter a business name or individual name,
not both. If the party is an escrow company,
title company, exchange company, corporation,
partnership, limited liability company,
non-grantor trust, or estate, enter the business
name and business identification number (FEIN,
CA Corp no., CA SOS file no.). If the business
name is not applicable, include the individual's
or grantor's first name, initial, last name, and
identification number (SSN or ITIN).

Part II – Seller/Transferor
Information
Enter only business or individual name, not
both, mailing address, and identification number
of the seller/transferor. If the seller/transferor
has applied for an identification number,
but it has not been received, enter, “Applied
For” in the space for the seller’s/transferor's
identification number and attach a copy of
the federal application behind Form 593.
After the identification number is received,
call Withholding Services and Compliance at
888.792.4900 or 916.845.4900.
If the seller/transferor is an/a:
•	 Individual, enter the SSN or ITIN. If the
sellers/transferors are husband/RDP
and wife/RDP 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/transferor. Instead, complete a
separate Form 593 for each seller/transferor.
•	 Business, enter the business name in
the business name field along with the
federal employer identification number
(FEIN), California Corporation number
(CA Corp no.), or California Secretary of
State (CA SOS) file number.
•	 Grantor trust, enter the individual name and
SSN or ITIN of the grantor that is required
to file a tax return and report the income.
Do not enter the name of the grantor trust
or trustee information. The grantor trust
is disregarded for tax purposes and the
individual seller/transferor must report
the sale and claim the withholding on the
grantor's individual tax return.
•	 Non-grantor trust, enter the name of the
non-grantor trust and the non-grantor
trust’s FEIN. If the non-grantor trust has not
applied for a FEIN, leave the identification
number blank. Do not enter the trustee
information. When the non-grantor trust
receives their FEIN, contact Withholding
Services and Compliance at 888.792.4900 or
916.845.4900.
•	 Single member limited liability company,
enter the name and identification number of
the single member.
For all other non-individual sellers/transferors,
enter the FEIN, CA Corp number, or CA SOS
file number.
Enter the address (or parcel number and
county) of the California real property
transferred.

Page 8   Real Estate W/H Forms Booklet 2018

Conventional Sale/Transfer and Installment
Sale: Enter the address (parcel number and
county) of the transferred property.
Exchange: Enter the address of the relinquished
property.

Part III – Escrow or Exchange
Information
Line 1 – Escrow or Exchange Number
Enter the escrow or exchange number for the
property transferred. Do not include dashes
and/or spaces in the escrow or exchange number.
Line 2 – Date of Transfer, Exchange
Completion, Failed Exchange, or Installment
Payment
If the date is left blank, we will use a default
date of January 1 of the tax year in which the
Form 593 is received. Penalties may apply for
failure to file a complete, correct, and timely
information return. For additional information,
see General Information G, Interest and
Penalties.
Conventional Sale/Transfer: Enter the date
escrow closed.
Exchange: For completed exchanges, enter the
date that the boot (cash or cash equivalent)
was distributed to the exchanger. For failed
exchanges, enter the date when it was
determined that the exchange would not meet
the deferred exchange requirements and any
cash was distributed to the seller/transferor.
When withholding on boot or a failed exchange,
be sure to use the forms for the year that you
entered on line 2 (rather than the year of the
sale), since the seller/transferor will be able to
use installment sale reporting for the gain.
Installment Sale: For withholding on the down
payment, enter the date escrow closed. For
withholding on the principal portion of each
installment payment, enter the due date of the
installment payment.
Line 3 – Type of Transaction
Check one box that represents the type of real
estate transaction for which the withholding is
being calculated.
Conventional Sale/Transfer: Check this box if
the conventional sale/transfer represents the
close of the real estate transaction. This sale/
transfer does not contain any conditions such
as an installment sale, boot, or failed exchange.
Installment Sale Payment: Check this box to
report the sale or transfer as an installment sale
if there will be at least one payment made after
the tax year of the sale or transfer, or if you are
withholding on the down payment or principal
portion of any installment payment. Attach a
copy of the promissory note with the down
payment only. At the close of the real estate
transaction, if no down payment is received,
submit Form 593 with Part III, Line 3, Box B,
Installment Sale Payment checked and $0
reported on Line 5, Amount Withheld from this
Seller/Transferor.

Boot: Check this box if the seller/transferor
intends to complete a deferred exchange, but
receives boot (cash or cash equivalent) out of
escrow.
Failed Exchange: Check this box for any
failed exchange, including if a failed deferred
exchange had boot withheld upon in the original
relinquished property.
Line 4 – Withholding Calculation
Check one box that represents the method to
be used to calculate the withholding amount
on line 5. Either the Total Sales Price Method
(31/3% (.0333) of the total sales price, boot, or
installment sale payment) or the Optional Gain
on Sale Election based on the applicable tax
rate as applied to the gain on sale. Check only
one box, A-G. Trusts (Grantor and Non-grantor)
check box 4B. The trust's highest tax rate
is 12.3%.
Line 5 – Amount Withheld from this
Seller/Transferor
Enter the amount withheld from this transaction
or installment payment based upon the
appropriate calculation for either the Total Sales
Price Method or the Optional Gain on Sale
Election, below.

Withholding Calculation Using
Total Sales Price Method
Conventional Sale/Transfer:
a.	 Total Sales Price  . . . . . . . . . $__________
b.	 Enter the seller’s/transferor's
ownership percentage . . . . . . . _ _ _ ._ _%
c.	 Amount Subject to Withholding.
Multiply line a by line b and
enter the result  . . . . . . . . . . $__________
d.	 Withholding Amount. Multiply
line c by 31/3% (.0333) and
enter the result here and on
Form 593, line 5  . . . . . . . . . $__________
Installment Sale:
a.	 Amount Subject to Withholding.
If you are withholding on the
down payment in escrow,
enter the required amount of the
down payment. If you are
withholding on installment
payments received after the
close of the real estate transaction
or the final payoff in escrow, enter
the principal portion of
the payment  . . . . . . . . . . . . $__________
b.	 Withholding Amount. Multiply
line a by 31/3% (.0333) and
enter the result here and on
Form 593, line 5  . . . . . . . . . $__________

Exchange:
a.	 Amount Subject to Withholding.
For completed deferred
exchanges, enter the amount
of boot (cash or cash
equivalent) received by
the seller/transferor . . . . . . . $__________
b.	 Withholding Amount. Multiply
line a by 31/3% (.0333) and
enter the result here and on
Form 593, line 5  . . . . . . . . . $__________
Failed Exchange:
a.	 Total Sales Price. If a deferred
exchange is not completed or
does not meet the deferred
requirements, enter the total
sales price . . . . . . . . . . . . . . $__________
b.	 Ownership Percentage. If
multiple sellers/transferors
attempted to exchange this
property, enter this
seller’s/transferor's
ownership percentage.
Otherwise, enter 100.00% . . . . _ _ _ ._ _%
c.	 Amount Subject to
Withholding. Multiply
line a by line b . . . . . . . . . . . $__________
d.	 Withholding Amount. Multiply
line c by 31/3% (.0333) and
enter the result here and
on Form 593, line 5 . . . . . . . $__________

Withholding Calculation Using
Optional Gain on Sale Election
Conventional Sale/Transfer: Enter the amount
from Form 593-E, Real Estate Withholding –
Computation of Estimated Gain or Loss, line 17
on Form 593, line 5.
Trusts (Grantor and Non-grantor): Check
box 4B on Part III of Form 593 and use the
trust's highest tax rate, which corresponds to
the individual tax rate.
Installment Sale: The optional gain on sale
withholding amount for an installment sale is
calculated in two steps.
Step 1: Calculate the installment sale
withholding percent that will be applied to all
installment payments, including any deposits,
down payments, or amounts paid for the
seller/transferor received during escrow:
a.	 Estimated Gain On Sale. Gain on
sale from Form 593-E,
line 16  . . . . . . . . . . . . . . . . $__________

Step 2: Calculate the optional gain on sale
withholding amount:
a.	 Installment payment or
down payment . . . . . . . . . . . $__________
b.	 Multiply line a by installment
sale withholding percent
calculated in Step 1 . . . . . . . $__________
c.	 Withholding amount. Multiply
line b by the applicable tax rate*
and enter the result here and
on Form 593, line 5  . . . . . . $__________
When withholding on the principal portion of
each installment payment using the Optional
Gain on Sale Election, the seller/transferor
must provide the buyer/transferee with the
Installment Sale Withholding percent to include
on Form 593-I.
Send the original Form 593, the required
withholding payment on the down payment,
and a copy of the promissory note to the FTB.
Do not attach a copy of the promissory note
with withholding on installment payments sent
in after the close of the real estate transaction.
Exchange:
a.	 Boot Amount. Not to
exceed recognized gain . . . . $__________
b.	 Withholding Amount. Multiply
line a by the applicable tax
rate* and enter the result
here and on Form 593,
line 5 . . . . . . . . . . . . . . . . . . $__________
Failed Exchange:
a.	 Gain on Sale from
Form 593-E, line 16 . . . . . . . $__________
b.	 Ownership Percentage. If
multiple sellers/transferors
attempted to exchange this
property, enter this
seller’s/transferor's
ownership percentage.
Otherwise, enter 100.00% . . . . _ _ _ ._ _%
c.	 Amount Subject to
Withholding. Multiply
line a by line b . . . . . . . . . . . $__________
d.	 Withholding Amount. Multiply
line c by the applicable tax
rate* and enter the result here
and on Form 593, line 5  . . . $__________

If a failed deferred exchange had boot withheld
upon in the original relinquished property,
reduce the withholding amount by the amount
previously remitted to the FTB.
*Tax Rates
Individual and Trusts (Grantor
and Non-grantor). . . . . . . . . . . . . . . . . . . 12.3%
Non-California Partnership. . . . . . . . . . . . 12.3%
Corporation. . . . . . . . . . . . . . . . . . . . . . . 8.84%
Bank and Financial Corporation. . . . . . . 10.84%
S Corporation. . . . . . . . . . . . . . . . . . . . . . 13.8%
Financial S Corporation. . . . . . . . . . . . . . 15.8%

Seller/Transferor Signature
A signature is only required by the
seller/transferor if the Optional Gain
On Sale Election method is used. If the
sellers/transferors are married or RDPs and
they plan to file a joint return, then your
signature and your spouse's/RDP's signature
are both required.
Electronic signatures shall be considered as
valid as the originals.
Preparer’s Name and Title/Escrow Business
Name
Provide the preparer’s name and title/escrow’s
business name and phone number.

b.	 Total Sale Price. Selling price
from Form 593-E, line 1  . . . $__________
c.	 Installment sale withholding
percent, divide line a by line b . _ _ _._ _%

Real Estate W/H Forms Booklet 2018  Page 9

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Visit our website:

ftb.ca.gov

Page 10  Real Estate W/H Forms Booklet 2018

TAXABLE YEAR

2019

CALIFORNIA FORM

593-C

Real Estate Withholding Certificate

Part I – Seller/Transferor Information	

Return this form to your escrow company.

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)

-

-

-

Ownership percentage

.   %

To certify that you qualify for a full or partial withholding exemption, check all boxes that apply to the property being sold or transferred. (See instructions)

Part II – Certifications which fully exempt the sale from withholding:
 1.	 	 The property qualifies as the seller’s/transferor’s (or decedent’s, if sold by the decedent’s estate or trust) principal residence within the meaning of Internal
Revenue Code (IRC) Section 121.
 2.	 	 The seller/transferor (or decedent, if sold by the decedent’s estate or trust) last used the property as the seller’s/transferor’s (decedent’s) principal residence within
the meaning of IRC Section 121 without regard to the two-year time period.
 3.	 	 The seller/transferor has a loss or zero gain for California income tax purposes on this sale. To check this box you must complete Form 593-E, Real Estate
Withholding‑Computation of Estimated Gain or Loss, and have a loss or zero gain on line 16.
 4.	 	 The property is being compulsorily or involuntarily converted and the seller/transferor intends to acquire property that is similar or related in service or use to
qualify for nonrecognition of gain for California income tax purposes under IRC Section 1033.
 5.	 	 The transfer qualifies for nonrecognition treatment under IRC Section 351 (transfer to a corporation controlled by the transferor) or IRC Section 721 (contribution
to a partnership in exchange for a partnership interest).
 6.	 	 The seller/transferor is a corporation (or a limited liability company (LLC) classified as a corporation for federal and California income tax purposes) that is either
qualified through the California Secretary of State (SOS) or has a permanent place of business in California.
 7.	 	 The seller/transferor is a California partnership or a partnership qualified to do business in California (or an LLC that is classified as a partnership for federal and
California income tax purposes and is not a single member LLC that is disregarded for federal and California income tax purposes).
  8.	 	 The seller/transferor is a tax-exempt entity under California or federal law.
  9.	 	 The seller/transferor is an insurance company, individual retirement account, qualified pension/profit sharing plan, or charitable remainder trust.

Part III – Certifications that may partially or fully exempt the sale from withholding:
Real Estate Escrow Person (REEP): See instructions for amounts to withhold.
10.	 	 The transfer qualifies as a simultaneous like-kind exchange within the meaning of IRC Section 1031.
11.	 	 The transfer qualifies as a deferred like-kind exchange within the meaning of IRC Section 1031.
12.	 	 The transfer of this property is an installment sale where the buyer/transferee is required to withhold on the principal portion of each installment payment. Copies
of Form 593-I, Real Estate Withholding Installment Sale Acknowledgement, and the promissory note are attached.

Seller/Transferor Signature
To learn about your privacy rights, how we may use your information, and the consequences for not providing the requested information, go to ftb.ca.gov/forms and search
for 1131. To request this notice by mail, call 800.852.5711.
Under penalties of perjury, I declare that I have examined the information on this form, including accompanying schedules and statements, and to the best of my knowledge
and belief, it is true, correct, and complete. I further declare under penalties of perjury that if the facts upon which this form are based change, I will promptly notify
the REEP.
Seller’s/Transferor’s Name and Title

Seller’s/Transferor’s Signature

Date

Spouse’s/RDP’s Name

Spouse’s/RDP’s Signature

Date

	
Seller/
Transferor
	

If you checked any box in Part II, you are exempt from real estate withholding.
If you checked any box in Part III, you may qualify for a partial or complete withholding exemption.

	

Except as to an installment sale, if the seller/transferor did not check any box in Part II or Part III of Form 593-C, the withholding will be 31/3% (.0333) of the
total sales price or the optional gain on sale withholding amount from line 5 of Form 593, Real Estate Withholding Tax Statement. If the seller/transferor does
not return the completed Form 593 and Form 593-C by the close of the real estate transaction, the withholding will be 31/3% (.0333) of the total sales price,
unless the type of transaction is an installment sale. If the transaction is an installment sale, the withholding will be 31/3% (.0333) of the down payment.

	

If you are withheld upon, the REEP should give you one copy of Form 593. Attach a copy to the lower front of your California income tax return and make a
copy for your records.

7131193

Form 593-C  2018

2019 Instructions for Form 593-C
Real Estate Withholding Certificate

References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and to the California Revenue and Taxation Code (R&TC).

General Information

Specific Instructions

In general, for taxable years beginning on or after January 1, 2015,
California law conforms to the Internal Revenue Code (IRC) as of
January 1, 2015. 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.
Like-Kind Exchanges – For taxable years beginning on or after
January 1, 2014, California requires taxpayers who exchange property
located in California for like-kind property located outside of California,
and meet all of the requirements of the IRC Section 1031, to file an
annual information return with the Franchise Tax Board (FTB). For more
information, get form FTB 3840, California Like-Kind Exchanges, or go to
ftb.ca.gov and search for like kind.

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 – Follow the country’s practice for entering the city,
county, province, state, country, and postal code, as applicable, in the
appropriate boxes. Do not abbreviate the country name.

A	Purpose
Use Form 593-C, Real Estate Withholding Certificate, to certify that you
qualify for a full or partial withholding exemption.
Qualifying for an exemption from withholding or being withheld upon
does not relieve you of your obligation to file a California income tax
return and pay any tax due on the sale of California real estate.
You may be assessed penalties if:
•• You do not file a tax return.
•• You file your tax return late.
•• The amount of withholding does not satisfy your tax liability.
The seller/transferor must submit this form before the close of the real
estate transaction to prevent withholding on the transaction. After the
real estate transaction has closed, amounts withheld may be recovered
only by claiming the withholding as a credit on the appropriate year’s tax
return.

B	 How to Claim the Withholding
To claim the withholding credit, you must file a California tax return.
Report the sale or transfer as required, and enter the amount from
line 5, Amount Withheld from this Seller/Transferor, of Form 593, Real
Estate Withholding Tax Statement, on your California tax returns as
withholding from Form(s) 592-B or 593. If your filing status changed
after escrow closed and before filing your California tax return, call the
Withholding Services and Compliance phone service at 888.792.4900 or
916.845.4900 for instructions on how to claim your withholding credit.
Claim your withholding credit on one of the following:
•• Form 540, California Resident Income Tax Return
•• Form 540NR Long, California Nonresident or Part-Year Resident
Income Tax Return
•• Form 541, California Fiduciary Income Tax Return
•• Form 100, California Corporation Franchise or Income Tax Return
•• Form 100S, California S Corporation Franchise or Income Tax Return
•• Form 100W, California Corporation Franchise or Income Tax
Return – Water’s-Edge Filers
•• Form 109, California Exempt Organization Business Income
Tax Return
•• Form 565, Partnership Return of Income
•• Form 568, Limited Liability Company Return of Income

Page 12  Real Estate W/H Forms Booklet 2018

Part I – Seller/Transferor Information
Enter the name, tax identification number, and address of the
seller/transferor. If the seller/transferor does not provide a tax
identification number, then Form 593-C is void, and withholding is
required.
Note: If you choose to provide a copy of Form 593-C to the
buyer/transferee, delete the seller’s/transferor’s tax identification number
on the buyer’s/transferee’s copy.
If the seller/transferor is an individual, enter the social security
number (SSN) or individual taxpayer identification number (ITIN). If the
sellers/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/transferor. Instead, complete a separate Form 593‑C for each
seller/transferor.
If you do not have an SSN because you are a nonresident or a resident
alien for federal tax purposes, and the Internal Revenue Service (IRS)
issued you an ITIN, enter the ITIN in the space provided for the SSN.
An ITIN is a tax processing number issued by the IRS to individuals who
have a federal tax filing requirement and do not qualify for an SSN. It is a
nine-digit number that always starts with the number 9.
If the seller/transferor is a business, enter the business name in the
name field along with the federal employer identification number (FEIN),
CA Corporation number (CA Corp no.), or CA Secretary of State (CA SOS)
file number.
If the seller/transferor is a grantor trust, enter the grantor’s individual
name and SSN. For tax purposes, the grantor trust is disregarded and the
individual seller/transferor must report the sale and claim the withholding
on their individual tax return. If the trust was a grantor trust that became
irrevocable upon the grantor’s death, enter the name of the trust and the
trust’s FEIN. Do not enter the decedent’s or trustee’s name or SSN.
If the seller/transferor is a non-grantor trust, enter the name of the trust
and the trust’s FEIN. Do not enter trustee information.
If the seller/transferor is a single member limited liability company
(SMLLC), enter the name and tax identification number of the single
member.
For all other non-individual sellers/transferors, enter the FEIN, CA Corp
no., or CA SOS file number.
Ownership Percentage
Enter your ownership percentage rounded to two decimal places
(e.g. 66.67%). If you are on the title for incidental purposes and you have
no financial ownership, enter 0.00 and skip to Seller/Transferor Signature.
You will not be withheld upon.
Examples of sellers/transferors who are on title for incidental
purposes are:
•• Co-signers on title (e.g., parents co-signed to help their child qualify
for the loan).
•• Family members on title to receive property upon the owner’s death.
Property Address
Enter the address of the CA real property transferred. If no street address,
enter the parcel number and county.

Part II – Certifications Which Fully Exempt the
Sale From Withholding
Line 1 through Line 9
Check all boxes that apply to the property being sold or transferred.
Line 1 – Principal Residence
To qualify as your principal residence under IRC Section 121, you (or the
decedent) generally must have owned and lived in the property as your
main home for at least two years during the five-year period ending on
the date of sale. Military and Foreign Service, get FTB Pub. 1032, Tax
Information for Military Personnel.
You can have only one main home at a time. If you have two homes and
live in both of them, the main home is the one you lived in most of the
time.
There are exceptions to the two-year rule if the primary reason you are
selling the home is for a change in the place of employment, health,
or unforeseen circumstances such as death, divorce or termination of
registered domestic partnership, or loss of job, etc. For more information
about what qualifies as your principal residence or exceptions to the
two-year rule, get federal Publication 523, Selling Your Home. To get
federal publications, go to irs.gov, or call 800.829.3676.
If only a portion of the property qualifies as your principal residence, a
second Form 593-C will need to be completed to certify an exemption on
the portion not used as a principal residence.
The allocation method should be the same as the seller/transferor used to
determine depreciation.
Line 2 – Property last used as your principal residence
If the property was last used as the seller’s/transferor’s, or decedent’s
principal residence within the meaning of IRC Section 121 without regard
to the two-year time period, no withholding is required. If the last use of
the property was as a vacation home, second home, or rental, you do not
qualify for the exemption. You must have lived in the property as your
main home.
If you have two homes and live in both of them, the main home is the one
you lived in most of the time.
Line 3 – Loss or Zero Gain
You have a loss or zero gain for California income tax purposes when
the amount realized is less than or equal to your adjusted basis. You
must complete Form 593-E, Real Estate Withholding – Computation of
Estimated Gain or Loss, and have a loss or zero gain on line 16 to certify
that the transaction is fully exempt from withholding.
You may not certify that you have a net loss or zero gain just because you
do not receive any proceeds from the sale or because you feel you are
selling the property for less than what it is worth.
Line 4 – Involuntary Conversion
The property is being involuntarily or compulsorily converted when both
of the following apply:
•• The California real property is transferred because it was (or
threatened to be) seized, destroyed, or condemned within the
meaning of IRC Section 1033.
•• The seller/transferor intends to acquire property that is similar or
related in service or use in order to be eligible for nonrecognition of
gain for California income tax purposes.
Get federal Publication 544, Sales and Other Dispositions of Assets, for
more information about involuntary conversions.
Line 5 – Non-recognition Under IRC Section 351 or 721
The transfer must qualify for nonrecognition treatment under
IRC Section 351 (transfer to a corporation controlled by transferor)
or IRC Section 721 (contribution to a partnership in exchange for a
partnership interest).

Line 6 – Corporation
A corporation has a permanent place of business in California when it
is organized and existing under the laws of California or it has qualified
through the CA SOS to transact intrastate business. A corporation not
qualified to transact intrastate business (such as a corporation engaged
exclusively in interstate commerce) will be considered as having a
permanent place of business in California only if it maintains an office in
California that is permanently staffed by its employees after the sale.
S corporations must withhold on nonresident S corporation
shareholders. Get FTB Pub. 1017, Resident and Nonresident Withholding
Guidelines, for more information.
Line 7 – Partnership or Limited Liability Company (LLC)
Partnerships and LLCs are required to withhold on nonresident partners
and members.
Withholding is not required if the title to the property transferred is
recorded in the name of a California partnership or it is qualified to do
business in California.
Withholding is not required if the title to the property transferred is in the
name of an LLC, and the LLC meets both of the following:
•• It is classified as a partnership for federal and California income tax
purposes.
•• It is not an SMLLC that is disregarded for federal and California
income tax purposes.
If the LLC meets these conditions, the LLC must still withhold on
nonresident members. Get FTB Pub. 1017 for more information.
If the SMLLC is classified as a corporation for federal and California
income tax purposes, then the seller/transferor is considered a
corporation for withholding purposes. Refer to Line 6.
If the LLC is an SMLLC that is disregarded for federal and California
income tax purposes, then that single member is considered the
seller/transferor and title to the property is considered to be in the name
of the single member for withholding purposes.
When completing Form 593-C as the single member of a disregarded
LLC, write on the bottom of the form that the information on the form
is for the single member of the LLC, so the Real Estate Escrow Person
(REEP) will understand why it is different from the recorded title holder.
If the single member is:

Complete Form 593-C using:

An individual

The individual’s information

A corporation

The corporation’s information

A partnership

The partnership’s information

An LLC

The single member’s information

Line 8 – Tax-Exempt Entity
Withholding is not required if the seller/transferor is tax-exempt under
either California or federal law (e.g., religious, charitable, educational, not
for profit organizations, etc.).
Line 9 – Insurance Company, Individual Retirement Account, Qualified
Pension or Profit-Sharing Plan, or Charitable Remainder Trust
Withholding is not required when the seller/transferor is an insurance
company, individual retirement account, qualified pension or profitsharing plan, or a charitable remainder trust.

Real Estate W/H Forms Booklet 2018  Page 13

Part III – Certifications That May Partially or
Fully Exempt the Sale From Withholding
Complete Part III only if you did not meet any of the exemptions
in Part II.
Line 10 – Simultaneous Exchange
If the California real property is part of a simultaneous like-kind exchange
within the meaning of IRC Section 1031, the transfer is exempt from
withholding. However, if the seller/transferor receives money or other
property (in addition to property that is a part of the like-kind exchange)
exceeding $1,500 from the sale, the REEP must withhold.
Line 11 – Deferred Exchange
If the California real property is part of a deferred like-kind exchange
within the meaning of IRC Section 1031, the sale is exempt from
withholding at the time of the initial transfer. However, if the
seller/transferor receives money or other property (in addition to property
that is a part of the like‑kind exchange) exceeding $1,500 from the sale,
the qualified intermediary must withhold.
If the exchange does not take place or if the exchange does not qualify
for nonrecognition treatment, the intermediary or accommodator must
withhold 31/3% (.0333) of the total sales price.
Line 12 – Installment Sale
The REEP reports the sale or transfer as an installment sale if there
will be at least one payment made after the tax year of the sale. The
withholding is 31/3% (.0333) of the down payment during escrow.
Buyers/Transferees are required to withhold on the principal portion of all
payments made following the close of the real estate transaction unless
an approval letter for the elect-out method is received.
When the withholding amount on the down payment is sent to the
FTB, the FTB must also receive a completed Form 593‑I, Real Estate
Withholding Installment Sale Acknowledgement, a completed Form 593,
and a copy of the promissory note.

Seller/Transferor Signature
You must complete and sign this form and return it to your REEP by
the close of the real estate transaction for it to be valid. Otherwise, the
REEP must withhold the full 31/3% (.0333) of the total sales price or the
optional gain on sale withholding amount from line 5 of Form 593 that
is certified by the seller/transferor, only for the optional gain on sale
election.
Penalty – Any seller/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.

Page 14  Real Estate W/H Forms Booklet 2018

TAXABLE YEAR

2019

Real Estate Withholding —
Computation of Estimated Gain or Loss

CALIFORNIA FORM

593-E

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/Transferor Information
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

Property address (if no street address, provide parcel number and county)

-

ZIP code

-

-

Part II – Computation
 1	
 2	
 3	
 4	

Selling price  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	1 _______________
Selling expenses  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	2 _______________
Amount realized. Subtract line 2 from line 1 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 	3 _______________
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/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 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .