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Q:

What are the withholding requirements for a nonresident who sold real estate in South Carolina during the tax year?

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A. Code Section 12-8-580 requires withholding on purchases of real property, or real and associated tangible personal property, from a nonresident seller. The buyer or whoever withholds on the buyer’s behalf is liable for withholding and remitting the money to the Department on Form I-290, "Nonresident Real Estate Withholding." The withholding payment is due on or before the 15th day of the month following the month in which the sale took place. The amount of withholding can be computed as follows: 1. The buyer is required to withhold 7% (5% if the seller is a corporation) of the gain recognized by the nonresident seller. The amount of gain recognized by the seller is reported on SC Form I-295, "Seller's Affidavit." 2. If the seller fails to provide the buyer with the required affidavit stating the amount of gain, the buyer is required to withhold 7% (5% for corporations) of the amount realized. If a withholding payment is based on the amount realized, the seller may file for a ... more
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