Printable Maine Rew 5 Form

1. What is the Maine REW-5 form?

   The Maine REW-5 form is a request for exemption or reduction in the withholding of Maine income tax on the sale of real property in Maine. This form is particularly relevant for sellers who are nonresidents of Maine at the time of closing. By submitting this form, sellers can potentially reduce or eliminate the amount of tax withheld from the sale proceeds.

2. Who should file the REW-5 form?

   Any seller of Maine real property who is a nonresident at the time of closing may file this form. This includes individuals, firms, partnerships, corporations, and other entities. If there are multiple sellers, each must complete a separate REW-5, unless they are married and filing jointly.

3. When should the REW-5 form be submitted?

   The REW-5 form must be submitted at least five business days before the closing date. If you choose to mail the form, allow an additional 2-3 weeks for processing. Timely submission is crucial to ensure that the request for exemption or reduction is considered.

4. What information is required on the REW-5 form?

   The form requires various details including the seller's name, mailing address, Social Security Number (SSN) or Employer Identification Number (EIN), property details, method of acquisition, and estimated closing costs. Be prepared to provide supporting documentation for claims made on the form.

5. What supporting documents might be needed?

   Maine Revenue Services may request additional documentation to support your claim for exemption or reduction in withholding. This could include proof of purchase price, appraisals, or tax assessments. It's essential to gather these documents to avoid delays in processing your request.

6. How is the withholding rate determined?

   The standard withholding rate is 2.5% of the total consideration from the sale. However, sellers may request a reduction if this amount exceeds their maximum tax liability. The State Tax Assessor can authorize a reduced withholding rate based on the seller's gain from the sale.

7. Can I designate someone to represent me?

   Yes, you can designate a representative to act on your behalf during the real estate withholding process. This is done by completing the Representative Information and Power of Attorney sections on the form. However, the representative must be an individual, not a firm, and they will need a completed Form 2848-ME to act on your behalf.

8. What happens if my property is in foreclosure?

   If the property is subject to foreclosure and the consideration received does not exceed the debt secured by the property, no Maine income tax withholding is required. It’s important to note that Maine Revenue Services does not issue withholding exemption certificates for foreclosure sales.

9. How can I submit the REW-5 form?

   You can submit the REW-5 form via email to realestate.withholding@maine.gov or by fax at (207) 624-5062. Make sure to include all supporting documents when submitting your request.

• Purpose of the Form: The Maine REW-5 form is used to request an exemption or reduction in withholding of Maine income tax when selling real property in the state.
• Who Can File: This form can be submitted by sellers who are non-residents of Maine, including individuals, partnerships, corporations, and trusts.
• Submission Timeline: To ensure processing, the form must be submitted at least 5 business days before the closing date. If mailed, allow an additional 2-3 weeks for processing.
• Supporting Documentation: Additional documents may be required by Maine Revenue Services (MRS) to support the request for exemption or reduction in withholding.
• Withholding Rate: The standard withholding rate is 2.5% of the total consideration. However, sellers may request a reduced rate based on their maximum tax liability.
• Closing Costs: Applicants should accurately report their original closing costs and any capital improvements made to the property, as these can impact the withholding calculation.
• Power of Attorney: If someone is representing the seller in this process, a Power of Attorney must be provided. This allows the representative to access confidential information related to the seller’s tax records.
• Accurate Information: Sellers must ensure that all information provided on the form is accurate and complete. Misrepresentation can lead to penalties under perjury laws.

When dealing with the Maine REW-5 form, there are several other documents and forms that may be required or useful during the process of requesting an exemption or reduction in withholding of Maine income tax on the sale of real property. Understanding these documents can help ensure a smoother transaction.

• Form 2848-ME (Power of Attorney): This form allows a seller to designate a representative who can act on their behalf in tax matters. It grants the representative the authority to receive confidential information and discuss tax records with Maine Revenue Services.
• New York Boat Bill of Sale: This important document records the transfer of ownership of a boat; for more details, visit Top Forms Online.
• Purchase and Sale Agreement: This document outlines the terms of the sale between the buyer and seller. It typically includes details such as the sale price, closing date, and any contingencies that must be met before the sale is finalized.
• Real Estate Transfer Tax Declaration (RETTD): This form is used to report the sale of real property and the associated transfer taxes. It provides information about the property, the buyer, and the seller, and is typically filed with the local tax assessor.
• HUD-1 Settlement Statement: This document itemizes all the costs associated with the closing of a real estate transaction. It includes details about the sale price, closing costs, and any adjustments made during the closing process.
• Appraisal Report: If the property was inherited, an appraisal report may be necessary to establish the property's value at the time of the decedent's death. This document helps determine the basis for any gain or loss on the sale.
• Tax Assessment Records: These records from the local tax assessor's office can provide information about the property's assessed value and may be required to support claims made on the REW-5 form.
• Closing Statement: Similar to the HUD-1, this document summarizes the financial aspects of the closing, including the distribution of funds and any fees associated with the transaction.
• Documentation of Capital Improvements: Sellers may need to provide evidence of any capital improvements made to the property, such as receipts or contracts. This information can affect the calculation of the seller's gain or loss on the sale.

Having these documents ready can facilitate the process and help ensure compliance with Maine's tax regulations. It is advisable to review each document carefully and consult with a tax professional if there are any uncertainties regarding the requirements.

Guidelines on Writing Maine Rew 5

After completing the Maine REW-5 form, it is essential to submit it to the Maine Revenue Services at least five business days before the closing date. This allows the agency to review your request for an exemption or reduction in withholding of Maine income tax on the sale of your real property. If you submit the form via mail, be prepared for an additional processing time of 2-3 weeks.

1. Fill in the applicant’s name: Include your name and your spouse’s name if applicable.
2. Provide the mailing address: Enter your current mailing address.
3. Enter SSN or EIN: Fill in your Social Security Number or Employer Identification Number.
4. Include daytime phone number: Provide a contact number where you can be reached.
5. Input email address: Enter your email or your Power of Attorney's email address.
6. Indicate ownership percentage: Write down your percentage of ownership in the property.
7. List all sellers: Include the names of all sellers. If there are multiple sellers, each must complete a separate form.
8. Enter buyer(s) name(s): Provide the names of the buyer(s).
9. Describe the property: Fill in the MAP, BLOCK, LOT, and SUB-LOT numbers, along with the physical address and municipality/township.
10. State the date of acquisition: Enter the date you acquired the property.
11. Indicate method of acquisition: Specify how you obtained the property and provide the necessary proof.
12. List allowable closing costs: Enter the amount of closing costs you incurred during the original purchase.
13. Detail capital improvements: Provide a list of capital improvements made to the property.
14. Enter total sales price: State the total sales price and closing date of the current pending sale.
15. Estimate current closing costs: Write down your estimated allowable closing costs for the current sale.
16. Provide rental/commercial use details: If applicable, indicate the length of time the property was used for rental or commercial purposes.
17. Report on federal income tax return: Describe how the sale will be reported on your federal income tax return.
18. Sign and date the form: Ensure you sign and date the application, confirming the information is accurate.

When filling out the Maine REW-5 form, attention to detail is crucial. Here are ten important dos and don’ts to keep in mind:

• Do submit the form at least 5 business days before the closing date.
• Don’t forget to include all sellers' names if there are multiple sellers.
• Do provide accurate and complete information, including your SSN or EIN.
• Don’t use outdated documentation to support your claims; ensure everything is current.
• Do specify the method of acquisition clearly, whether through purchase, inheritance, or gift.
• Don’t neglect to list all capital improvements made to the property.
• Do attach any necessary supporting documents, such as purchase agreements or tax assessments.
• Don’t leave any sections blank; if unsure, consult the instructions or seek help.
• Do sign the form and include the date of your signature.
• Don’t forget to provide your contact information for any follow-up questions.