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<br />MAY-12-2005 THU 09:51 AN CITY OF SAN LEANDRO <br /> <br />FAX NO. 5105773310 <br /> <br />N011CE <br />FEDERAL FOREIGN IN\'ESTMENT IN REAL PROPERTY TAX ACT OF 1980 (FIRPT A) <br /> <br />lIJ'1On rbe sale ofUnilc:d Sillies r!!1I1 property. by a rwn.rl!sillc:nt ;tlic:n. fortiJl:n l,:Orporatitm.l'larlnership or UllSl.l/Ie l'lol'eign InVl:'illnem 111 Rbal <br />l'roJ>l!n~' Tax Act of 19l1O (FIRPT A), and as revised by me Tax Reform Al.'l of 1984 (26 OSCA 897 (ex I )(AXO ilnd 26 use,," 1445) rellllirc~ <br />the lranstere~. (Puyer) of real fl~rt)' Ji. withhold Inle:rMI J<<:ve!lue ~rviu ill<.'Dffie lax~ in aD llIlIOUnlll(j\lllJ w lOll (1(}%) P\'r\.-e~1 o1lbl' salo <br />price from litller\ procuds. if ANY of tII~ foll(lWing conditions lIrulJlCl. <br />(J) 'fIle ~lIilll! price is greal6 rhAn 1300.000.00 <br />(2) The sellins pric;t is le~~ than $300.000 AND rhe l'lllrclwer does not imend 10 occ:upy the property as his r\lSicklllce for al <br />lta"l SO ~ of the: time of the firllltwu 12 mooth puriuds folluwmi:\ Ihl: dltlt flf u'ilni>fer. <br /> <br />Wilhholdinll is nOI required if both of the following rondi(ions 1re met: <br />(I) The selling price I~ ICI\.~ lhan S:WO,OOO <br />ancl <br />(Z.) The Blfycr is acquiring the proJ>l!rty as his residence. and the buyer or other qlWlfyln; family member willllCCUJ'ly the <br />propllrty for allu51 50~ of tht timl': dutin~ each of Ihe rim 12'll\OIllb periods following tran~fllT of ritlll W tIw buyer. <br /> <br />If Ih.: purc:h<<~.r who is rc:quirvd 10 y;jtlthoJd jO\:OlI\C lax t'rom Ih~ sd\er fails 10 do 50, dill pvreh$or ib l'IIhject II) fin.:s lIod pcmllltillS as <br />prMide<l unclcr lntwn~1 Revenue Code Seclion 1445. The seller may ~1Iesl a wa\vr.r or a r~ wllhholdinll ..mount by submlllill{! a <br />~Tirwn tlKjUl!U for a 'qualiryinj,\ 'Wbmetll' fIT 'wilhlloldinll ceniflCale' (F(lI'l'll S28S-lI) Ill: <br />Direc1or. lnll:rnal Re"Ill1Ul: Scrvi~'l: <br />Philawlpl1la Service Center <br />1>.0. Box 210li6 <br />Philadelphia. PA 19114.(}5S6 <br /> <br />Escrow Holder will. Upt)D wri~ in~II1.lCti(lns fTlIm the purcllllscr, Wllhholcl ~ralln(.:(lme Tilx from W: !'eller ilncI will depll!'il said lllll. with the <br />ImernaJ Revenue Service. together ...im IRS romlS 8288 and 8288-A. The fee charged for this servl~"1I is S25.00 pll}"iWle to tlw e!;Crow <br />hlllder. <br /> <br />CALIFORNIA '\\1THHOLDING <br /> <br />III accordal\CC with ~clions 18662 1IlIe! 18668 of the Revenue and Taxation Code, a tr3IISferee (Buyer) l11li)' be rllCjuired tQ wlrbbokJ an <br />ill1'IOIInI c:q\llll 11I;I 1/3 percent of tile sales price in me cue of a di5ptJ5iliOl1of C.\liforniio re~l property interest by either' <br />t. A s~lJer who is an ine!ivldu.11 or wbetlthe dir>bursemenl imilruclifll'ls Mllthnri~ ~ pr(l(.'CCds to be lOenl Uta f"otlcnciallntc:rmc:diu)' ur <br />the seller, OR <br />.2. A corporate seller tII.u ~~ no pl!rmalllJn~ pllll:lI of business in California. <br /> <br />The buyer mOlY lH:rome subject 10 pe.nal~ for failure III ...ithhold an aMOul\( ~uallc, tile gt'QItl of 10 petcClll of lh~ 3,"ounl requirc:d 10 be <br />wilhhc:1d or five hundred dolldr~ ($500). <br /> <br />H,)\l't:ver, nnt "-ithstanding any other provision intluded ill !be Cali1orni<l foUlI1ltS referenced above, 1\<1 huyr:r will be rl!<jll.ir~ 1(1 withhold 1I11Y <br />amuunllll he: subjecllo penalty fllr failure If> withhold if: <br />1. The sales price of IlIe Califnrnia relll propcmy wnveyld does nolexceed one hundred thousand dollars ($100.000.00). OR <br />2. 'llIe seller el:CI.~L1leS iI writtc:n CCltrific::ation. under penalty of perjUT}'. cenifyinlllhat the seller is a corporation with a pemtanelll J'lLace of <br />busine'5 ill Califf>mia. OR <br />3 TIte Moller. who Illl\fi individual. eXt{:lIlL"$ a wtinen cenifiC8k, U1'Ider the penalt;v of perjury. ....f allY (If tho: following; <br />A. ThaI the California real properl)' being cooveyed is the wiler's principal residencu (within the tne:Uling of Seclron 121 of rhe <br />Internal Revellue: CcJ(Jc:-). <br />B. nl31 me C"llfomia real property being ':l)nveyed is ur ....iII be txclWlGed for propert)' l.f li}:e kind (\\'illlin th~ mc:iininl.! {If Sectivn <br />1031 (.fllw Inlel1Ull Revenue CUdt:). OOlf>nl1 to lhe ealenl of the amount of gain TIUl r~"Iuircd t(,}w ttcOl!niz.td for Clllifornia <br />income laX purposes L1r~r S<<:tion 1031 of the Internal Revenue Code. <br />C. 1lullhe California real property has been cODlpuLrorily or involunrarily cl)l\vemd (wilhin tho;, meanin~ of Seetinn J();l3 tlf the <br />InlllT1\ll.1 Revenue ClJlIe) illlclthlll we slIllllT inlendli 10 llC4luire property gimilar'or trlatdd in setvice or u.~ ~o a,~ iii he dipihle fllr <br />nonrecOl1Dilioo of 1:"in for California income laX purposes under s.,ctiot) 1033 of the Jnlerlllll RevenUl!' C.ode. <br />n, Th~ the California rul propeny trllDsaction will result in a l"~ for Cilifllmia incnme tax purpoliCS. <br /> <br />"The Seller \g S\JbjtctlO pllMlty for knowingly filing a frauchlJenl cerlifiCilte fur the purpose tlf Il\"llilling th~ withholding rtUJuiremeru. <br /> <br />TIll': C-illifornia ~tlIll1ttlS referenced above ill<.'1wk provisillJQ which aulhllrize the: Franc:hise Tax BoilrcJ to grant redllaul withholding and <br />waivers from \\.jthhoJdi1lj: nn II CII-'iC-by-cllSe t>asllltor corporations or oth!!r tlntities, butllOl for lnclil'idual~ or rl!vocable truslS. <br />na.f1'oll..:ona. <br /> <br />MAY 12,2005 10:48 <br /> <br />5105773310 <br /> <br />P. 10 <br /> <br />Page 10 <br />