Seller-financing a flip in CA: How do i fill out the withholding forms (and who withholds what)?
Can someone point me to the most appropriate way to fill out the Real Estate Withholding Tax Statement (593) given the following scenario? I assume we check the "installment sale" box but I am unclear as to who is required to withhold what. Thanks for any help! I've consulted my tax people but would appreciate your help given I would like to speed up the turnaround.
I purchased the subject property, unimproved land, for $79k a few months ago.I am now under contract to sell it, owner financed.
$125,000 purchase price. $25,000 down.
Seller then finances the remaining $100,000 interest at 12% per annum payable at approximately $1,000 per month, remaining principle balance due in 5 years.
Buyer agrees to make principle reduction payments of $10,000 every 6 months from originiation.
Payments to adjust accordingly, minus $100 per month with each principal reduction payment.