by admin | Oct 22, 2021 | Uncategorized
The Maryland “Non-Resident” Real Estate Withholding Tax is 8% for Individuals (8.25% for LLCs, Estates, and Entities) on the PROCEEDS or GAINS from the sale of a property.
A Full Exemption is possible if a seller can certify any of the special situations listed below.
- Principal Residence
- Principal Residence — Active-Duty Military, Certain Government Employees
- Tax-Free Exchange for purposes of 1031 of the Internal Revenue Code
- Transferor/Seller is receiving zero proceeds from this transaction because proceeds are going to another seller/owner (ex. consignor)
- The transfer is pursuant to an installment sale under 453 of the Internal Revenue Code
- Transfer of inherited property is occurring within 6 months of date of death
- Transferor/seller is the custodian of an individual retirement account (IRA)
- The transfer is pursuant to a specific Internal Revenue Code section
A Partial Exemption is possible, especially if a seller has paid income tax in the state of Maryland.
Before a seller fills out the Exemption Request, they will need to collect:
- Mailing Address of Buyer’s Title Company
- Settlement Statement from Purchase
- Preliminary/ Estimated Settlement Statement from Sale (Ask the Title Company)
- Receipts/ Proof of Capital Improvements
- Depreciation Deducted on Federal Returns
- Page 1 of Sales Contract
- Complete Exemption Form https://www.marylandtaxes.gov/forms/21_forms/MW506AE.pdf .
They will then need to print and mail these items to the following address (proof of delivery recommended):
Comptroller of Maryland Revenue Administration Division
Attn: NRS Exemption Requests
P.O. Box 2031 Annapolis, MD 21404-2031
Upon review, a full or partial Exemption Certificate will be mailed to the Title Company within 21 days of receipt.
If a Seller fails to submit the Exemption Form 21 prior to settlement, they can complete a Refund Form and follow the same instructions listed above. https://www.marylandtaxes.gov/forms/21_forms/MW506R.pdf (Post Settlement)
If you or your client have any questions, don’t hesitate to reach out to our team.
Good luck with your sale!
by admin | Oct 20, 2021 | Uncategorized
If you are selling commercial property, it is likely that you have sold properties held in a corporation. Advantage Title has a strong commercial side and is capable of handling your commercial deals as well.
However, it is still possible to have a residential property be held in a corporation. So what do we need to know when the owner of the record is a corporation?
Let us help.
The first thing we will need is a copy of the Articles of Organization, a copy of the Bylaws, the EIN # for the corporation, and a Certification of Resolution. The Certification of Resolution will tell us who has the Signing Authorization for this property. Once we have these documents, we will verify that the cooperation is in good standing with the state.
For the contract of sale, the seller will be the name of the corporation. The seller will sign as “*Name, Officer, Name of Corporation.*” For example, “Jessica Scott, President, ABC Company.”
At settlement, we will disburse funds into a separate bank account for the corporation.
That’s it! The rest of the transaction will proceed as normal. As always, feel free to call or text Business Development Manager Jessica Scott at (443) 487-1584 to guide you through the process.
by admin | Oct 13, 2021 | Uncategorized
What do you do when you have a listing coming to the market but the owner is in an LLC? Does anything change? How does the sale work?
We can help.
When a property is in an LLC, it means that the business is holding the title to the property. While the sale isn’t too different from a traditional owner sale, there are quite a few documents we will request in the transaction. So it is prudent to make sure you let your seller know ahead of time what documents to collect for clearing the title.
We will need:
- A copy of the Operating Agreement
- A copy of the Articles of Organization (signing Authorization)
- EIN # for LLC
- Proceeds Disbursement Authorization
On our end with the title, we will verify that the LLC is in good standing with the state.
When writing the contract of sale, be sure to have the seller as the name of the LLC and the signatures to be “*Name of LLC by Name of Signer*” and their member status. For example, Advantage Title LLC by Jessica Scott, Member.
And there you have it! Selling a property in an LLC is easy! If you have questions, contact Advantage Title directly when your next LLC listing pops up. We’ll be happy to walk you through it.
by admin | Oct 6, 2021 | Uncategorized
O is for Owners,
T is for Title, scratchin’ temple
The last P, it’s pretty simple.
It’s Policy.
An Owner’s Title Policy could be the only thing that saves your asset from a huge financial loss.
OTP … It’s as simple as ABC.
For most people, owning a home is the cornerstone of their financial future. Over time, as your home builds equity, you can use that money to pay for college, supplement retirement or put a down payment on that beach house!
OTP can shield you from being sued if someone claims THEY own your land, or they have a lien against the equity, or they fixed the roof and nobody paid them. Protecting against claims does not just cover payment of loss. It also provides attorney support in court should things get nasty.
You ever had a bank and met a lender on a nice hello?
Well, banks do not mess around with their money. If you get a loan, they make you pay for a lender’s title insurance policy to protect them. Buyers have the option to purchase a policy to protect themselves, but this article is not about where you should or shouldn’t get a policy. … You absolutely should!
Hip Hop Hooray!
You are still reading so you must agree. Since we’re all down with OTP, let’s talk about how much it costs and the level of protection you want.
The cost is based on the purchase price of the home. It’s a one-time payment, good for as long as you, or your heirs, own the home. But you’ve got a couple of options to choose from.
First, you’ve got your basic policy. That protects you from liens in the history of your title through the date your deed is recorded in the public records. Basic policies are fine, but they do not cover everything.
Now when you buy a policy, do it well, and make sure that it counts.
If you want Treach-level protection, you need an enhanced policy. Enhanced Owner’s Policy provides expanded coverage to include:
○ Post-Policy Forgery
○ Post-Policy Encroachments
○ Post-Policy Adverse Possession
○ Post-Policy Easement by Prescription
○ Building Permit and Zoning Violations
○ Restrictive Covenant Violations
○ And a lot more
If you feel my flow, contact me to get a quote. We can talk specifics, and I will show you how to get down with a discount on a reissue rate.
by admin | Oct 5, 2021 | Uncategorized
Have you ever sold a home where the owner of the record is in a trust? What does that mean? How is that different? What does the title do differently, and how do you know when a property is in a trust?
A trust refers to the fiduciary relationship created to appoint one party to manage assets on behalf of a third party. This relationship is established between the creator of the trust (the grantor) and the trustee, who holds and administers the property within the trust on behalf of the beneficiary designated to receive the property. The trustee is appointed to administer the trust while acting in the best interests of the grantor.
So how does this transaction differ from a traditional sale?
Well, the short answer is … it isn’t that different. There are a few things we (the title company) will need in order to begin the sale. We will need a copy of the Trust Agreement from the Seller. This will include names, permissions, and who is the signing agent of the trust.
The sale contract will have the seller’s name as the name of the Trust and the representative of the trust will sign as Trustee. For example: “Trustees name”, Trustee.
For settlement, we will need to verify the separate bank account that is open in the name of the trust.
Whenever a listing comes up that has the owner of the record in a trust, the best thing to do is to call Advantage Title immediately. Our Director of Business Development, Jessica Scott, will walk you through the process and ensure that your transaction is handled smoothly and efficiently.
