Lauren Speidel Promoted to Regional Manager for Exeter 1031 Exchange

January 25, 2020--Chicago, Illinois--Exeter 1031 Exchange Services, LLC announced the promotion of Lauren Speidel to the position of Regional Manager for the company's Midwest Regional Office located in Chicago, Illinois. 

Ms. Speidel will continue to be responsible for the expansion of the company's Midwest Regional Office, based in Chicago, Illinois. She is responsible for sales, marketing, and client relationship management for the Midwest Region including, but not limited to, Chicago, Illinois, Wisconsin, Minnesota, Michigan, Ohio, Indiana, Iowa, and Missouri. 

Read the full press release here.

California Revises Real Estate Withholding Statement (CA FTB Form 593)

The California Franchise Tax Board (“FTB”) announced changes to real estate withholding forms on November 5, 2019.  The California FTB consolidated California FTB Forms 593, 593-C, 593-E, and 593-I into one California FTB Form 593 to eliminate confusion among taxpayers and their tax advisors.  However, they have actually created more confusion and more paperwork for all parties involved. 

FTB Form Now Required for Every Sale of Real Estate

Beginning January 1, 2020, the new California FTB Form 593, Real Estate Withholding Statement, must be completed and signed during the each and every closing or escrow process.  The California FTB Form 593 should be submitted to the California FTB whenever a sale of real property occurs no later than the 20th day of the month following the month in which the real estate sale closed.  In the past, the California Form 593 was submitted to the California FTB if, and only if, there was actual withholding required.  The new form must now be submitted to the California FTB on every real estate sale transaction regardless of whether there is withholding required or not.

California FTB withholding is required when California real estate is sold or transferred unless the seller qualifies for certain withholding exceptions. The real estate escrow person (“REEP”) is anyone involved in closing the real estate transaction which includes any attorney, escrow company, title company, QI, or anyone else who receives and disburses payment for the sale of California real property.  The REEP is required to notify buyers of California FTB withholding requirements, unless the buyer is a Qualified Intermediary (“QI”) in a tax-deferred exchange pursuant to Section 1031 of the Internal Revenue Code. The amount withheld from the seller or transferor is sent to the California FTB as required by R&TC Section 18662. 

Exemptions to Withholding 

There are certain withholding exemptions such as Sections 121 (tax free exclusion on the sale of a primary residence), 721 (tax free contribution to a partnership), 1031 (tax-deferred exchange of investment property), 1033 (tax-deferred exchange due to a natural disaster or eminent domain action) of the Internal Revenue Code as well as others. 

Buyers Now Responsible for Withholding on Installment Notes 

The REEP reports the sale or transfer as an installment sale if there will be at least one payment made after the tax year of the sale. The withholding is 3 1/3% (.0333) of the down payment during escrow. Buyers/Transferees are required to withhold on the principal portion of all payments made following the close of the real estate transaction.