Under California withholding, if applicable, how much must be withheld and to which agency?

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Multiple Choice

Under California withholding, if applicable, how much must be withheld and to which agency?

Under California withholding on real estate transfers by nonresident sellers, a portion of the sale price is withheld to prepay California taxes due on the transaction. The amount withheld is 3 1/3 percent of the sale price and is paid to the Franchise Tax Board (FTB). This money goes to the state tax authority, not the IRS, and it is based on the gross sale price rather than the seller’s net proceeds after expenses. If the eventual tax due is less than the withholding, the seller can claim a credit or refund when filing the California return with the FTB.

Under California withholding on real estate transfers by nonresident sellers, a portion of the sale price is withheld to prepay California taxes due on the transaction. The amount withheld is 3 1/3 percent of the sale price and is paid to the Franchise Tax Board (FTB). This money goes to the state tax authority, not the IRS, and it is based on the gross sale price rather than the seller’s net proceeds after expenses. If the eventual tax due is less than the withholding, the seller can claim a credit or refund when filing the California return with the FTB.

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