The California 597 W form, known as the Withholding Exemption Certificate and Nonresident Waiver Request for Real Estate Sales, is essential for sellers who may be exempt from withholding requirements when selling property in California. This form allows sellers to certify their eligibility for exemptions based on specific criteria, including the sale price and residency status. Understanding how to accurately complete this form can streamline the selling process and ensure compliance with state tax regulations.
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The California 597 W form plays a crucial role in the real estate transaction process, particularly for nonresident sellers. Designed as both a Withholding Exemption Certificate and a Nonresident Waiver Request, this form helps determine whether a seller is subject to California's nonresident withholding requirements during a property sale. If the total sale price is $100,000 or less, or if the seller meets specific criteria—like being a California resident or selling a principal residence—exemptions may apply. The form requires detailed seller information, including social security numbers, corporate identification, and property details. Sellers must answer a series of questions to establish their eligibility for withholding exemptions. If they find themselves liable for withholding, the form outlines the necessary steps for requesting a reduced withholding amount. Ultimately, proper completion and submission of the 597 W form can save sellers from unnecessary tax burdens while ensuring compliance with state regulations.
YEAR
20
Withholding Exemption Certificate and
CALIFORNIA FORM
Nonresident Waiver Request for Real Estate Sales
597-W
Part I Withholding Exemption Certificate
Seller’s Information
Name
Social security no. CA corp. no. FEIN SOS file no.
Address
PMB no.
Note:
Failure to furnish your tax identifica-
tion number will void this certificate.
City, State, ZIP Code
Phone number
Ownership
(
)
percentage
Property address (if no street address, provide parcel number and county)
Read the following and check the boxes as they apply (see General Information C, Exemptions from Withholding (Part I)
in the instructions for definitions):
YES
NO
1. Is the total sale price of this property $100,000 or less?
.
. . .
. . . .
. .
. . . . .
2.Are you a resident of California? If yes, provide your California street address, city, and ZIP Code.
__________________________________________________________________________________________________________
3.
Does the property being sold qualify as your principal residence within the meaning of Internal Revenue Code (IRC) Section 121? .
4.
Is the seller a corporation that is qualified through the California Secretary of State or has a permanent place of
business in California? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Is the seller a partnership or a limited liability company (LLC) with recorded title to the property in the name of the partnership or LLC and will the partnership or LLC file a California tax return to report the sale and withhold on foreign and domestic nonresident partners as required? (Get FTB Pub. 1017, Nonresident Withholding Partnership Guidelines, for withholding information.) . . . . . . . .
6. Is the seller a tax-exempt entity under either California or federal law? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Is the seller an irrevocable trust with at least one trustee who is a California resident and will the trust file a California tax return to
report the sale and withhold when distributing California source taxable income to nonresident beneficiaries as required?
8.Is the seller an estate where the decedent was a California resident at the time of death and will the estate file a California fiduciary tax
return to report the sale and withhold when distributing California source taxable income to nonresident beneficiaries as required? . . .
9. Is the seller a bank or a bank acting as a fiduciary for a trust? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10. Is the seller an insurance company, Individual Retirement Account (IRA), or qualified pension/profit sharing plan? . . . . . . . . . . . . . .
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 completing this form does not exempt me from filing a California income tax return to report this sale.
Seller’s name (or seller’s agent if seller is
not an individual) and title (type or print) ____________________________________________________________________________________________
Seller’s Signature_____________________________________________________________________________ Date:___________________________
If you answered “Yes” to any of the above questions, STOP HERE. You are exempt from the nonresident withholding requirements. Provide this form to your escrow company or the buyer (withholding agent).
If you answered “NO” to all of the above questions, you are subject to the nonresident withholding requirements. The required withholding is 3 1/3% of the total sale price. Do you expect your tax liability from the sale of this property to be substantially less than that amount? If so, would you like to request a reduced amount of withholding?
Yes. Complete the Nonresident Withholding Waiver Request (Part II) and send this form to the Franchise Tax Board (FTB).
No. STOP HERE. Your escrow officer will withhold 3 1/3% of the total sale price and send it to FTB on your behalf. Obtain the seller’s copy of Form 597, Nonresident Withholding Tax Statement for Real Estate Sales, from the escrow officer to attach to your California income tax return when you file and claim the amount withheld.
Escrow Officer: If withholding is required, complete Form 597, Nonresident Withholding Tax Statement for Real Estate Sales, and send one copy to the FTB with the payment of withholding and give two copies to the seller. The seller needs a copy of Form 597 to claim the withholding credit on the California tax return filed to report the sale.
For Privacy Act Notice, get form FTB 1131.
597W01109
Form 597-W (REV 2001) Side 1
Part II Nonresident Withholding Waiver Request (please print or type)
Name of seller (see instructions if more than one)
Seller’s Entity Type
Seller’s social security number (SSN)
Individual(s)
-
Mailing address
Corporation
California corporation no. FEIN
S Corporation
City, state, and ZIP Code (province, country, and postal zone)
Seller’s spouse’s SSN (if applicable)
Estate
Trust
Seller’s email address
Property Information
Property Address (if no street address, provide parcel number and county):
Seller acquired property by (check one):
Date seller acquired property:
Purchase
Inheritance
Foreclosure/Repossession
Gift
1031 Exchange
call (888) 792-4900 U.S. toll-free
Seller’s adjusted basis:
or (916) 845-4900
Other____________________
Purchase price
$
____________________________
Add: improvements
Use of property at time of sale:
Length of time used for this purpose:
Less: depreciation
Rental / Commercial
Adjusted basis
Secondary / Vacation home
Years ________ Months _________
Vacant land
Provide all required documentation listed in the instructions. Attach any other
Other (attach explanation)
documents necessary to verify the adjusted basis.
Escrow Information
Name and address of Escrow Company:
Escrow Company email address
Name of Escrow Officer:
Escrow number:
Escrow Company or Officer
FAX number:
telephone number:
Contract price (total sale price):
Estimated close of escrow date:
Buyer’s Information
Name of buyer (see instructions if more than one)
Buyer’s social security number (SSN)
Address (number and street, PO box or rural route)
PMB no. (if applicable)
Buyer’s spouse’s SSN (if applicable)
State in detail your reason for requesting a withholding waiver or reduced withholding. If there is more than one nonresident seller, attach a separate sheet listing additional nonresident seller’s information. See instructions for examples of situations for which a waiver or reduced withholding is allowed and for the required information and documentation.
Attach additional sheets if needed. The FTB cannot make a determination on your request unless you provide all required information and documentation. See instructions.
Seller’s Signature ____________________________________________________________________________________ Date: _____________________
Side 2 Form 597-W (REV 2001)
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