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CA 593-E


Ringers

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One of my clients (an individual and resident of FL) is selling a CA condominium she purchased in 2011 as an investment.  The sale price will be $282400 and the profit will be $55283.  In preparing the CA 593-E, the withholding based on the sale price is $9404 while the withholding on the profit is $6571.  In my reading of the instructions, I can not find if it says you can elect the smaller of these two amounts as the amount of withholding to be paid to CA, but I assume that that is the case.  Is this the correct interpretation and is the OPTIONAL withholding payment actually mandatory?🤔

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You can use the smaller number provided you fill out the form correctly.   The good news is that you work with the escrow agent on the withholding.   You don't do it through the state.   So long as you provide the completed form to the escrow agent, they should withhold the smaller amount.   You can call the escrow agent and talk it over with them if there is any confusion.

Tom
Modesto, CA

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@Ringers forgot to add...some of the escrow companies will provide the withholding certificate with the closing documents rather than mailing out at the end of the year.   Have your client look for the 592 or 593 in their documents.   You will need it for their return next year.   CA will not refund the money without the information on that document.

Tom
Modesto, CA

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