June 2024 Newsblog

My daughter sold her condo in LA  and I am helping her with filing income taxes. She has owned and used the property as her principal residence for more than 2 out of the 5 year period right before the sale, which should qualify for the State Franchise Tax Board Withholding exemption. But the escrow agent still withheld 3.33% at closing. Why is that and how can we get the withholding tax back?

If your daughter completed the 593 Withholding Certificate in escrow, provided a social security number and checked box 1 in Part III Section (Certifications that allow exemption), then she should have been exempt from withholding, and a withholding should not have occurred. Can you check with your daughter if she remembers completing this form correctly?

However, now that the escrow is closed and the withholding is done, the only way to get it (or a portion) back is to claim it through her State income tax return to be filed this year. Please ask her to request a copy of the 593 and 593V form sent to the State. You will need the forms to claim the funds back. Getting a copy of the actual check used is good, too.

There are a couple of educational moments here:

Escrow Officers don’t know your personal financial situation. The 593 form is confusing, so ASK your financial counsel (CPA, etc) if you have any questions. If the 593 form does not look like it’s completed correctly, escrow should be bringing up their concern to you and verify. 

If NO boxes in Part III are checked, then Escrow Officers WILL automatically withhold and show it as a line item on the estimate closing statement for the Seller to review and approve. If a Seller sees that amount, it is time to question it! 


~ Video of the Month ~ 

For those of us who hate doing laundry

How to fold a t-shirt in UNDER 2 seconds!


~ Thought of the Month ~

You can retire to California where…

1. Your income is over $450,000 but you still can’t afford a house.

2. The fastest part of your commute is going down your driveway

3. You know how to eat an artichoke. And prefer organic avocado oil.

4. When someone asks you how far something is, you tell them how long it will take to get there rather than how many miles away it is.

5. The four seasons are: Fire, Flood, Mud, and Drought.



My YouTube Offering for the Month


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