Hello everyone,I wanted to see if anyone can explain the FTB withholding requirements for out of state property owners.

I have many other examples (not withholding portions of security deposits for resident caused damage, not back billing utilities, material vendor fee increases without discussion).

These investors are looking for capital for anything and everything from earnest money deposits, renovation costs of the property, downpayment and closing cost assistance for acquisition of a new property, or help with holding costs while the property is undergoing renovation and not producing income. 

Days on market matter since I am holding the house during that time and I have costs associated with holding.

Asking them to fund your deal can be uncomfortable until you realize that your deal will make them money and it is selfish of you to withhold that opportunity from the people that you care about. 

disclaimer to BP Nation: you should talk to your tax professional regarding withholding and liability for estimated tax payments to avoid penalties.

Withholding changes in your application affecting your material data  is also not good and would be considered mortgage fraud.

I would pay close attention to the law though as it states that if you WILLFULLY withhold that information you cannot utilize the deposit. 

And not only are you required to withhold like Dan said, you are responsible for paying their 30% if you dont withhold and they dont file.  

If you hire a teenager to mow the lawn or baby sit, you need to file paperwork with the IRS and withhold taxes.