CA withholding on rents
scott s.
got a letter from my CA property manager. I own rental real estate in
CA and I am a non-resident. Per my property manager, he is required to
withhold 7% of the gross rents unless I obtain a waiver from ftb.
I went to ftb web site and found the form 588 to request the
waiver, but I am curious about this. At first blush I figured
this was some new revenue enhancement thing from CA, but looking
at the web site, it doesn't seem like this is new. Maybe my property
manager just figured out he was supposed to be withholding?
I make regular estimated tax payments and file my non-res CA taxes
every year, so I'm assuming the waiver should be no big deal? 7%
of the gross is rather steep, esp since CA seems unable to cover
income tax refunds timely.
scott s.
..
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D. Stussy
news:Xns9CECA7BCBFFCD...@216.168.3.70...
> While waiting for the Christmas ham to cook ---
> got a letter from my CA property manager. I own rental real estate in
> CA and I am a non-resident. Per my property manager, he is required to
> withhold 7% of the gross rents unless I obtain a waiver from ftb.
> I went to ftb web site and found the form 588 to request the
> waiver, but I am curious about this. At first blush I figured
> this was some new revenue enhancement thing from CA, but looking
> at the web site, it doesn't seem like this is new. Maybe my property
> manager just figured out he was supposed to be withholding?
>
> I make regular estimated tax payments and file my non-res CA taxes
> every year, so I'm assuming the waiver should be no big deal? 7%
> of the gross is rather steep, esp since CA seems unable to cover
> income tax refunds timely.
Although you may be filing a non-resident return every year, I suspect the
reason behind this is that there's alot of noncompliance in this area, and
California is after every cent it can get its "hands" on.
Mark Bole
> While waiting for the Christmas ham to cook ---
> got a letter from my CA property manager. I own rental real estate in
> CA and I am a non-resident. Per my property manager, he is required to
> withhold 7% of the gross rents unless I obtain a waiver from ftb.
> I went to ftb web site and found the form 588 to request the
> waiver, but I am curious about this. At first blush I figured
> this was some new revenue enhancement thing from CA, but looking
> at the web site, it doesn't seem like this is new. Maybe my property
> manager just figured out he was supposed to be withholding?
Is your rental property commercial or residential? From the form 588
instructions, it seems only a payer in a trade or business needs to
withhold from your rent payments.
Maybe, as you suggest, your property management company is just trying
to cover their behind.
-Mark Bole
scott s.
september.org:
>
> Is your rental property commercial or residential? From the form 588
> instructions, it seems only a payer in a trade or business needs to
> withhold from your rent payments.
>
> Maybe, as you suggest, your property management company is just trying
> to cover their behind.
This is a single-family residence. The property manager is a firm which
does rental management only as its business. From reading the ftb forms
it sounds like they are mainly interested in entertainers/ sports persons
who are non-residents but come into the state and get 1099 income. In
2008 my CA income tax was 3.3% of my gross rents, so a 7% withholding
would result in significant overwithholding.
scott s.
..