Page 17 - CA English Foreign Buyers & Sellers eGuide
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Taxes & FIRPTA
California Withholding Requirements
Some states, such as California, require that certain sellers “prepay” the state
taxes incurred on the gain of the sale by withholding of a percentage of the sale
proceeds at closing. State law requires the buyer to withhold unless an exception
applies. The buyer may be subject to penalties for failure to withhold.
The withholding requirements are complex, which is why it is important for the
seller to consult with their CPA for tax advice. For more information please con-
tact the State of California Franchise Tax Board.
Taxes & FIRPTA
California Withholding Requirements
Some states, such as California, require that certain sellers “prepay” the state
taxes incurred on the gain of the sale by withholding of a percentage of the sale
proceeds at closing. State law requires the buyer to withhold unless an exception
applies. The buyer may be subject to penalties for failure to withhold.
The withholding requirements are complex, which is why it is important for the
seller to consult with their CPA for tax advice. For more information please con-
tact the State of California Franchise Tax Board.
