Maine Request for Exemption or Reduction in Withholding of Maine Income Tax on the Disposition of Maine Real Property

Request for Exemption or Reduction in Withholding of Maine Income Tax on the Disposition of Maine Real Property
2024 Form REW-5
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Form REW-5

Request for Exemption or Reduction in
Withholding of Maine Income Tax on the
Disposition of Maine Real Property

2024

File Form REW-5 online at revenue.maine.gov.
Note:	 This form is for sales occurring in 2024; submissions filed on a prior year form may be subject to delay. This form must be	
	
submitted at least 5 business days before the closing date. If mailed, please allow an additional 2 to 3 weeks for processing.

	

Applicant’s last name (or name of entity)

Applicant’s first name (if applicable)

SSN or federal EIN

	

Applicant spouse’s last name (if applicable)

Spouse’s first name

Spouse’s SSN

	

Applicant’s mailing address (number and street)

	

Applicant’s email address

	

Check here if applicant is a corporation required to file Form 1120ME.................................................................................

City/Town

State

Zip Code

Applicant’s daytime phone number	

1.	 Applicant’s percentage of ownership. (If less than 100.00%, line 1a must be completed.)..........1. 		

.	%

1a.
	
Name(s) of all other sellers (if applicable)
2.
	

Buyer(s) name(s)

3.
	

Physical address of property

Municipality/Township

Closing date

Date and method of acquisition. Enter the date the applicant originally acquired the property and check the box that indicates the
applicant’s method of acquisition. Additional documentation may be requested to verify the original acquisition. See instructions.
4.	 Date of acquisition or date of decedent’s death. See instructions................................................4.
5. 	 Method of acquisition:
	
(check one)

a) Purchase
b) Inheritance: (	
c) Gift or other

Decedent’s name

)

SSN

d) Like-kind exchange
6.	

Original purchase price/basis. See instructions..........................................................................6.	$			.00

7.	

Applicant’s allowable closing costs from original purchase of property. See instructions...........7.	$			.00	

8.	

Capital Improvements. See instructions.....................................................................................8.	$			.00

9.	

Add lines 6, 7, and 8...................................................................................................................9.	$			

10a.	 Length of time during the applicant’s ownership that the property was used for rental or
	
commercial use. If there was no rental/commercial use, continue to line 11..............................10a. 		

years	

.00	

months

10b.	 Allowed or allowable accumulated depreciation. See instructions.........................................10b.	$			.00
Continue on Form REW-5, page 2

2024 Form REW-5, Page 2
Applicant’s SSN or EIN
11.	 Adjusted basis. Subtract line 10b from line 9......................................................................... 11.	$			.00
	
12.	 Total sales price. See instructions............................................................................................12.	$			.00
13. 	 Applicant’s estimated allowable current closing costs. See instructions..................................13.	$ 			

.00

14.	 Amount realized. Subtract line 13 from line 12.......................................................................14.	$ 			

.00

15.	 Estimated gain/loss subject to federal and Maine income tax. Subtract line 11 from
	
line 14.......................................................................................................................................15.	$			.00
16.	 How will this sale of real property be reported on the applicant’s federal income tax return? See instructions.

Under penalties of perjury, I declare that I have examined this application and attached schedules and statements, and to the best of
my knowledge and belief they are true, correct and complete. If you are signing on behalf of the applicant(s), you must provide a written
power of attorney authorization with this request. To assign a designated representative, complete the Representative Information and
Limited Power of Attorney below. You must sign the authorization or complete Form 2848-ME (available at www.maine.gov/revenue/taxreturn-forms/general-forms) before MRS can speak with your designated representative. If you are signing on behalf of your employer,
include authorization.
Applicant’s signature

Applicant’s name

Date

This request for a withholding rate reduction or exemption is submitted in accordance with 36 M.R.S. §§ 5250-A(3)(B) and (4), which
authorizes the State Tax Assessor to issue a certificate of exemption or reduction in the amount of tax to be withheld. The rate of
withholding is 2.5% of the total consideration or, at the request of the seller, the State Tax Assessor may authorize a reduced
amount of withholding equal to the gain multiplied by 7.15% for individuals or 8.93% for a C corporation, in calendar year 2024.
Limited Power of Attorney (complete only if you want someone to represent you during the real estate withholding process)
By signing below, the selling party appoints the individual named in the Representative Information section below to act as their
representative with authority to receive confidential information and to discuss your tax records, related to this form, with MRS. I understand
that my representative may not act on my behalf, unless I provide a Form 2848-ME, Power of Attorney. I also understand that signing this
form does not revoke other power of attorney forms on file with MRS.
Applicant’s signature

Print name (and title, if applicable)

Date

Applicant spouse’s signature (if applicable)

Print name (and title, if applicable)

Date

Representative Information
Representative name (and title, if applicable)

Firm or company name

Representative’s mailing address (number and street)

City/Town

Country (if not United States)

Email address	

State

Zip Code

Telephone number

2024 Form REW-5 General Instructions
Purpose of Form: To request an exemption or reduction in
withholding of Maine income tax on the disposition of Maine
real property.

Withholding Certificate Issued by the State Tax
Assessor: A withholding certificate may be issued by the
State Tax Assessor to reduce or eliminate withholding on
transfers of Maine real property interests by nonresidents.

Who may File: A seller (individual, firm, partnership,
association, society, club, corporation, estate, trust, business
trust, receiver, assignee or any other group or combination
acting as a unit) of Maine real property who, at the time of
closing, is a nonresident of Maine.

The certificate may be issued if:
	

1.	No tax is due on the gain from the transfer; or,

	
2. Reduced withholding is appropriate because the 		
		 2.5% amount exceeds the seller’s maximum Maine 	
		 income tax liability on the gain realized from the		
		 sale. The maximum income tax liability is equal to 	
		 the seller’s capital gain multiplied by 7.15% (8.93% 	
		 for corporations).

When to File: Form REW-5 should be filed as soon as the
seller and buyer have reached an agreement to transfer
property. Sellers must allow MRS at least five business days
to respond to a Form REW-5 request. The response time will
be longer if the request is missing required information or
supporting documentation. MRS will not issue a withholding
certificate after the sale has closed.

If one of the above is applicable, file Form REW-5 to apply
for the certificate no later than five business days prior to
closing. Do not apply if the maximum Maine income tax
liability exceeds 2.5% of the consideration.

Maine Tax Portal (“MTP”): The MTP is
an online application that allows Maine
taxpayers to file tax returns and make
payments online quickly, easily, and eliminates the need to
file a paper form.

Foreclosure Sale: If property is subject to foreclosure and
the consideration received for the property does not exceed
the debt secured by that property, no Maine income tax
withholding is required. Foreclosure sale means a sale of real
property incident to a foreclosure and includes a mortgagee’s
sale of real estate owned property of which the mortgagee,
or third-party entity, retained or took ownership as the result
of an unsuccessful attempt to sell the property at the time
of a previous foreclosure auction. MRS does not issue
withholding exemption certificates for this type of foreclosure
sale (see Rule 803 and 36 M.R.S. § 5250-A(3-A)).

File Form REW-5 electronically using the MTP at
revenue.maine.gov. If unable to file online, you may send
Form REW-5 and all supporting documents via email to
[email protected], fax to (207) 624-5062,
or mail to Maine Revenue Services, Income/Estate Tax
Division - REW, P.O. Box 1060, Augusta, ME 04332-1060.

2024 Form REW-5 Specific Instructions
Applicant’s name: Enter the applicant’s (seller’s) name and
SSN or federal EIN. NOTE: If there are multiple sellers of the
property, each applicant (seller) must complete a separate
Form REW-5, except that married taxpayers that will file
a joint Maine individual income tax return requesting a
withholding exemption or reduction may complete one form,
listing both names and SSN’s on the form.

Lines 4 - 5. Date and method of acquisition: Indicate the
date the property was originally acquired by the applicant
and the method by which the applicant obtained ownership
of the property.

Mailing address: Enter the applicant’s current mailing
address.

a) Purchase. Verification of the original sales price,
such as a HUD-1 Settlement Statement, dually signed
Purchase and Sales Agreement, original Real Estate
Transfer Tax Declaration (RETTD) or tax assessment
from the town when purchased.

Additional documentation may be requested to support the
method of acquisition, such as:

E-mail address: Provide the applicant’s email address,
or the email address of the applicant’s Power of Attorney
(POA). If using the POA’s email, be sure to include Form
REW-5, page 2 or a properly completed Form 2848-ME.

b) Inheritance. A complete appraisal dated within six
months of the decedent’s death or a copy of the tax
assessment from the town.

Lines 1a - 2. If applicant’s ownership percentage on line
1 is less than 100%, the names of all other sellers must
be included on line 1a. On line 2, enter the name(s) of all
buyer(s). The seller(s) and buyer(s) are typically listed on
the Purchase and Sale Agreement. Attach additional pages,
if necessary.

c) Gift or other. Documents to verify the original
purchase price paid by the previous owner. If you cannot
locate these documents, the town where the property is
located may have a record of the purchase price.

Line 3. Enter the address of the property for sale, the name
of the municipality where the property is located, and the
expected closing date of the sale.

d) Like-kind exchange. A copy of the federal Form
8824 that was filed with the Internal Revenue Service
(“IRS”) to report the exchange.

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2024 Form REW-5 Specific Instructions, continued
Line 6. If line 5, box a (Purchase) is checked, enter the total
amount you paid for the property.

Line 16. Indicate whether the sale will be reported as a
gain, loss, exclusion, installment sale, like-kind exchange,
or other on the applicant’s federal income tax return. If you
do not know how the sale will be reported on the applicant’s
federal income tax return, consult a tax professional or the
IRS.

If line 5, box b (Inheritance) is checked, enter the fair market
value of the property on the date of the decedent’s death.
If line 5, box c (Gift or other) is checked, enter the adjusted
basis of the donor at the time of gift.

For more information about selling the property, determining
basis, reporting the sale, capital improvements and costs,
visit www.irs.gov. See the instructions for the following
federal forms and publications:

If line 5, box d (Like-kind exchange) is checked, enter the
basis of the property that was reported on federal Form
8824 in the year of the exchange.
Line 7. Enter the amount of the allowable closing costs
paid at the time the property was originally acquired by the
applicants*. Also see line 13.
Line 8. Enter the cost of capital improvements made to
the property. Do not include repairs made to the property.
For example: Cleaning or fixing a furnace is not a capital
improvement, but installing a new furnace is.
If you constructed a building after you acquired the property,
include the construction costs for the building.
You may be asked to provide additional information
supporting the amount entered on this line, such as a list
of capital improvements and the cost of each improvement,
and/or a copy of the construction contract, building permit
filed with the town, or the tax assessment from the year a
certificate of occupancy was received.

•	

Publication 523 (Selling Your Home)

•	

Publication 544 (Sales and Other Dispositions of
Assets)

•	

Form 1040 (U.S. Individual Income Tax Return)

•	

Schedule D (Capital Gains and Losses)

•	

Form 4797 (Sales of Business Property)

•	

Form 8824 (Like-Kind Exchanges)

•	

Form 8949 (Sales and Other Dispositions of Capital
Assets)

Limited Power of Attorney & Representative Information.
Although not required, you may designate someone to
represent you during the real estate withholding process. To
do so, complete the Representative Information and Limited
Power of Attorney sections on Form REW-5, page 2. The
designated representative must be an individual, although
a firm cannot be designated as your representative, an
individual of a firm can be.

Lines 10a - 10b. If the property was rented or used
commercially, enter the allowed, or allowable, accumulated
depreciation determined in accordance with the Internal
Revenue Code.

Appointing a Limited Power of Attorney designates a
representative to receive confidential information and
to discuss tax records related to your Form REW-5 filed
with MRS. The designated representative may not act on
your behalf, unless a completed Form 2848-ME (Power of
Attorney) is provided.

Line 12. Enter the total gross sales price of the property. Do
not subtract any fees. The sale price should match the sales
price on the Purchase and Sales Agreement.
Line 13. Enter the amount of the applicant’s allowable
closing costs from the current sale of this property*. Also
see line 7.
*Certain closing costs do not qualify. If available, enclose
a copy of the HUD-1 or Closing Statement from when you
purchased the property. Closing costs generally include
realtor fees, transfer taxes, and deed preparation fees.

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