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2. Are there any exceptions to the Maine real estate withholding requirement?
Yes. If the seller is a resident of Maine at the time of the sale, if the consideration is less than $50,000 (see note below) or if the capital gain is not recognized for federal or Maine income tax purposes, withholding is not required. See 36 M.R.S.A. § 5250-A(3) for these and other exemptions that may apply. See question 4 for requesting an exemption from the Maine real estate withholding requirement.
If property is subject to a foreclosure sale and the consideration received for the property does not exceed the debt secured by that property, no Maine income tax withholding is required and Maine Revenue Services does not require a withholding exemption certificate (see 36 M.R.S.A. § 5250-A(3-A)).
Note: Federally taxable gains on the sale of Maine real property are taxable by Maine, even if the total consideration is less than $50,000.
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