Can I Sign California Banking Form

Texas Property Affidavit 2014-2019 Form

hi everybody this is Francine Gonzales with innovative transactions we are a virtual real estate transaction coordinating company here in California I am a certified transaction coordinator and also a certified cars form trainer so my goal is to be able to bring all of my real estate friends some valuable information and educate them on some forms that we use in our everyday transactions so today I'm going to bring you some information on the qualified substitute form along with these sellers affidavit of non foreign status now these two forms are very misunderstood in the transactions and so it's very very important that we understand the legalities of these forms and that we are also you know advising our clients correctly on how these forms should be used now there's quite a bit of information so I'm going to look down at my notes here to make sure that I get everything covered today so what is the FERPA form so these sellers affidavit of non-porn status is commonly known as the FERPA form so this is the foreign investment in real estate property tax Act since January 1st 1985 the Act was required that the buyer withhold 15 I'm sorry 10 to 15 percent of the gross sales price and they must get that sent over to the IRS so if the seller is a foreign seller it is the buyers responsibility to make sure that those taxes are withheld and they need to direct escrow to withhold those taxes and to send them over to the IRS now what must be included on the seller affidavit form so the seller is required to furnish the buyer with a sellers affidavit which we know as the car form AS again also known as the FERPA form on this form it must state the sellers tax identification number also known your social security number it must also let the buyer know whether they are if they have foreign status and they need to sign this affidavit under penalty of perjury so they need to make sure that everything on that statement is correct so one of the big big challenges that we face Daisy's in our transactions is having the social security number on the form so a lot of times we will receive these forms with no social security number on it or it'll say on file with escrow well according to the IRS Code the seller has to provide that information to the buyer if you are using this form so if the seller does not provide the social security number then it is the buyers responsibility to withhold that ten to fifteen percent tax until the buyer or the seller supplies the buyer with the full affidavit form with all the required information now how long should the buyer hold the sellers affidavit okay so we as you know transaction coordinators and the real estate agent we're responsible for you know getting those forms over to the buyer and having the buyer sign acknowledgement but the buyer has to keep these in these forms on file in their records for five years the IRS can come back and ask them for this form and so they have to be able to supply a copy to the IRS should the IRS request that now the the alternative to providing the seller affidavit form with the social security number on it is the qualified substitute form now what this states is that the seller still has to fill out the affidavit form but they are giving that form to a qualified substitute other than the buyer and the qualified substitute is going to sign a form stating that they have that information on file so this could be your escrow companies it can be your title company it can also be the buyers broker however it can not be the listing agents broker it can't be the listing agent and with that being said on the car website it also states that an in-house escrow cannot act as a qualified substitute because there is a relation with the listing broker the qualified substitute has to be somebody outside of the listing broker now if the listing broker has an in-house escrow but they are an independent company and they are not directly associated with that broker then that escrow can be a qualified substitute then again this is a daily challenge that we face with in-house escrow supplying the qualified substitute form when they cannot be the qualified substitute according to the IRS code so the potential liability for the buyer is if this information is not is not given to the buyer and the buyer does not withhold the ten to fifteen percent tax if it does apply then the buyer can be responsible for that tax and they can also be responsible for any penalties and fees so we don't want to put our buyers in this situation where they are going to have to be responsible for this so we need to make sure as real estate professionals that we are doing this correctly and that if the seller does not supply the proper information providing that they are not a foreign seller then we need to make sure that the the buyer is directing escrow to withhold those taxes let's see here and so I think I've covered everything on my forms here just if you have any questions on what is a foreign seller if you pull up the car form AS you can look on the second page and it gives you all of the guidelines of what is qualified as a as a seller a foreign seller you're qualified substitute forms it even says right on the form on item number one that the qualified substitute cannot be the transfer broker so if you have any questions on the legal aspects of this I would recommend that you call car legal they're really great over there they will help answer any of your questions if you have any questions in regards to transactions please feel free to reach out to me you could reach me at nine five one eight three three seven two two three then again nine five one eight three three seven two two three thank you guys and have a great day