Posted by garyr on February 26, 2004 at 13:43:22:
I had already looked there. Ward posted an article promising more info to come, and it never came. I’ll ask there though, since it got no response here.
getting exempt from CA 3.3% witholding - Posted by garyr
Posted by garyr on February 24, 2004 at 15:08:43:
This has probably been asked and answered and I just can’t think of any good keywords to search on. As many know California now has this draconian witholding law where they take 3.3% off the top of any real estate transaction that doesn’t involve your primary residence. This can potentially tie up a large amount of $$ (far more than actual taxes owed would be) and make a significant % of annual income available only annually as a big tax refund check.
Obviously… this sucks. Since our new Gevernator is also a real estate baron (and clearly an expert at using trusts to hide specific ownership) this may change, but it’s there now.
There are a few individual exemptions, but they are mostly useless. Non individual exemptions exist for corps, parnerships and LLCs - but what the large print promises, the fine print takes away: the LLC exemption specifically disallows single member LLCs 
So in reality it’s partnerships and corps. It would appear that S-corporations are exempt.
Does this make an S-corp the default most attractive way of doing business in CA? How are others dealing with this?
Re: getting exempt from CA 3.3% witholding - Posted by bill H
Posted by bill H on February 25, 2004 at 21:43:36:
Gary:
Go over to Ward Hanigan’s site InnoVest's Foreclosure Forum and either repost or search the archives. That is a California board and your inquiry has been answered there many times.
Good Luck,
Bill H