CA Real Estate Withholding in a Trust??

Hello all,

First time dealing with this one. Client sold a house which was in a trust for the beneficiaries, which essentially liquidates/closes the trust. CA automatically withheld 3.33% of the sale price for taxes.

How does the client and/or beneficiaries get credit for that withholding? I couldn't readily see how it gets reported on the K1. And what if the withholding was too much? Do the beneficiaries get the refund, or the trustee?

Thank you all!

The trust needs to file a CA Form 592-B reporting the withholding on behalf of the beneficiaries. Of course the withholding are the beneficiaries, and therefore any refunds that may be due are the beneficiaries. Trustees manage the trust they don't own anything.

https://www.ftb.ca.gov/individuals/with ... ions.shtml

I couldn't readily see how it gets reported on the K1. And what if the withholding was too much? Do the beneficiaries get the refund, or the trustee?

When CA real property is sold by an irrevocable trust, the escrow company completes a Form 593 listing the name of the trust as the seller. The trustee will receive the 593 in the name of the trust. If there was witholding( e.g. default 3 1/3% ) then the trust files Form 592 Resident and non resident withholding statement, to transfer the withholding to the beneficiaries and provides the beneficairies with Form 592-B which the beneficaires then use on their 540 to claim thier share of withholding.
The process does not allow the trust to passthough withholding on the CA K-1 under the state withholding line.

K-1 line 13b

I couldn't readily see how it gets reported on the K1line.