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HomeMy WebLinkAboutC-8004-3 - East Balboa Boulevard, 707 - Grant DeedRECORDING REQUESTED BY CITY OF NEWPORT BEACH AND WHEN RECORDED MAIL TO: Attn: City Clerk City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660 ORDER: ESCROW NO.: Exempt from recording fee per Government Code § 27383 (Space Above This Line For Recorder's Use Only) GRANT DEED THE UNDERSIGNED GRANTOR(S) hereby request that the tax declaration not be made a part of the permanent record in the office of the county recorder pursuant to section 11932 of the Revenue and Taxation Code. City of Newport Beach Parcel No: 048-135-02 FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, City of Newport Beach, a municipal corporation and charter city hereby GRANTS to Balboa Theater Company, LLC, a California limited liability company the following real property in the City of Newport Beach, County of Orange, State of California described in EXHIBIT "A" and delineated on EXHIBIT "B," which exhibits are attached hereto and by this reference are incorporated in and made a part of this Deed, SUBJECT TO: 1) The condition that Grantees, their successors, and assigns, shall at all times use the property for theatrical, cultural center, event center, or for other related performing arts uses. Ancillary commercial uses of the property shall be permitted. 2) The Grantor shall retain the first right of refusal to repurchase the property at fair market value, should the Grantee elect to not redevelop or use the property in the condition stated above. In the event that the above condition is not satisfied or there is a breach of such condition, Grantor, its successor and assigns, may seek any remedy at law or in equity including, without limitation the right to seek specific performance or to enjoin the continuance of the breach of any such condition. It is specifically understood that any of the foregoing remedies may be employed at the option of the Grantor, and the failure of any of such remedies to be employed upon any one or more of any occurrence giving rise to such remedies shall not be a waiver of the right to employ such remedies upon the continuance of such occurrences or any subsequent occurrence. Dated: City of Newport Beach, a municipal corporation and charter city to By: Davekiff City Manager Approved as to Form: CITYX[Y'S OFFICE By: Aaron C. Harp LN NA vl.tioIL(0 City Attorney Attest: mm�- e bm' By: Leilani I. BrAvn City Clerk A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF OR 9,-W (v E, } ss. 011 FOR'/ On J 1Ay-WAR--A 11D , 201'1 before me, � EmN&Feo Ate t j V%AUt_V E.-/ , Notary Public, personally appeared DAME V -IFF , proved to me on the basis of satisfactory evidence to be the person(( whose nameH is/aye subscribed to the within instrument and acknowledged to me that he/&he4h&y executed the same in his/hcatr authorized capacity(i4es.), and that by his/heB4heit- signatures(s) on the instrument the person(a), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. JENNIFER ANN MULVEY Commission � 2045022 WITNESS my a�fial. Z `•' Notary Public - California (seal) Orange County Signature MY Comm. Expires Oct 12. 2017 t Grant Deed - Balbod Theater.CD.4ipany, LLC Page 2 EXHIBIT "A" LEGAL DESCRIPTION All that certain real property situated in the County of Orange, State of California, described as follows: Lots 4 and 5, Block 10, Balboa Tract, in the City of Newport Beach, County of Orange, State of California, as shown on a map recorded in Book 4, Page 11 of Miscellaneous Maps, in the Office of the County Recorder of said County. Excepting all oil, gas minerals and other hydrocarbon substances lying below a depth of 500 feet from the surface of said land, but without the right of entry upon any portion of the surface above a depth of 500 feet, to take, market, mine, explore or drill for same, as reserved in deed recorded April 28, 1969 in Book 8939, Page 653 of Official Records. Assessor's Parcel Number: 048-135-02 Grant Deed — Balboa Theater Company, LLC Page 3 EXHIBIT "B" PROPERTY DEPICTION Grant Deed — Balboa Theater Company, LLC Page 4 Exhibit "B" CERTIFICATE OF ACCEPTANCE This CERTIFICATE OF ACCEPTANCE is to certify that the interest in real property conveyed by the Grant Deed at the address commonly known as 707 E. Balboa Boulevard, located in the City of Newport Beach, County of Orange, State of California 92661 (A.P.N. 048- 135-02) dated , 2016 from the City of Newport Beach, a California municipal corporation and charter city, as Grantor and Balboa Theater Company, LLC, a California limited liability company, as Grantee, is hereby accepted on , 2016, by the undersigned officer on behalf of the City of Newport Beach pursuant to authority conferred by Resolution No. 1992-82 of the City Council adopted on July 27, 1992. The City consents to the recordation of said document in the Office of the Recorder of Orange County, State of California. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: By: Aaron C. Harp, City AttorneyM titul t V ATTEST: t Date: , l By: /V1/ Leilani I. Bro n, City Clerk CITY OF NEWPORT BEACH, A California municipal corporation Date: 111V -tit By: A Dave Kifff, City Manager RECOMMENDED FOR ACCEPTANCE: COMMUNITY DEVELOPMENT DEPARTMENT Date: By: Kimberly Brandt, Community Development Director A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) County of ORANGE ) OnA I p kl before mej E�aN%ftp- mw Y\yL,( Notary Public, personally appeared DAVE KIFF, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity(ies.), and that by his signature on the instrument the person, or the entity upon behalf of which the persons) acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signare (Seal) JENNIFER ANN MULVEY t Commission # 2045022 Z -s Notary Public - California Z ' Orange County Commm. Expires Oct 12, 201I Grant Dee"alboa Thur Company, LLC Page 5 FIRST AMERICAN TITLE INSURANCE COMPANY STATEMENT REQUIRED FOR THE ISSUANCE OF ALTA OWNERS AND/OR LOAN POLICIES Commitment No. 820331 Date: To the best knowledge and belief of the undersigned, the following is hereby certified with respect to the land described in the above commitment: That, except as noted at the end of this paragraph, within the last six (6) months (a) no labor, service or materials have been furnished to improve the land, or to rehabilitate, repair, refurbish, or remodel the building(s) situated on the land; (b) nor have any goods, chattels, machinery, apparatus or equipment been attached to the building(s) thereon, as fixtures; (c) nor have any contracts been let for the furnishing of labor, service, materials, machinery, apparatus or equipment which are to be completed subsequent to the date hereof; (d) nor have any notices,of lien been received, except the following, if any: 2. That Aere are no unrecorded contracts or options to purchase the land, except the following, if any: 3. That there are no unrecorded leases, easements or other servitudes to which the land or building, or portions thereol,_are subject, except the following, if any: 4. That the undersigned is authorized to execute this affidavit, has the ability to execute all instruments necessary to mortgage or convey the Land pursuant to authority, and that the owner was properly created and is in good standing in its state of origin and is properly authorized to do business in the state where the Land is located. 5. That the undersigned has not received any written notice of violation of any covenants, conditions or restrictions, if any, affecting the Land. 6. In order to induce First American Title Insurance Company (the "Company") to issue its policy(ies) of title insurance with full knowledge that the Company will rely upon the accuracy of same, the undersigned hereby agrees as follows: (a) The undersigned does hereby agree to indemnify and hold the Company harmless of and from any and all loss, cost, damage and expense of every kind, including attorneys' fees, which the Company shall or may suffer or incur or become liable for under its said policy or policies directly or indirectly, due to its reliance on the accuracy of the foregoing statements or in connection with its enforcement of its rights under this statement. (b) The undersigned does hereby agree to indemnify and hold the Company harmless dur+n-g +hip the last tillin n +k,+ that --- was conduGted-b,��r on behalf against loss or damage (including attorneys fees, expenses, and costs) incurred by the Company as a result of any untrue statement made herein. Seller / Owner cj�1� (Seal) e Kk t Q t C :x -PROVED AS TO FORM: CJiTY ATTORNETP OFFICE Date: i l 1 o l l -f" By: Aaron C. Harp, City Attorney (Seal) SELLER'S CERTIFICATION OF NON -FOREIGN STATUS UNDER FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ("FIRPTA") (26 U.S.C. 1445) File No: NCS-820331-SA1 For purposes of this form the following definitions shall apply: 1. Seller - the person(s) or entity(ies) that hold(s) the legal title to a U.S. real property interest under local law. 2. Transferor - the person(s) or entity(ies) that is/are the party(ies) treated as the transferor(s) under 26 USC 1445 (IRC Section 1445). The Seller may or may not be deemed to be the Transferor for purposes of withholding under FIRPTA. This form must be completed by each Seller or Transferor. All Sellers or Transferors providing this certification must have a taxpayer identification number ("TIN"). A TIN is not an indication that the Seller or Transferor is a resident alien or a U.S. citizen. Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor is a foreign person. THIS SECTION FOR INDIVIDUAL SELLER(S) WHO IS/ARE ALSO THE TRANSFEROR(S): EACH SELLER/TRANSFEROR MUST COMPLETE AND SIGN A SEPARATE FORM MAKE COPIES FOR EACH SELLER/TRANSFEROR TO COMPLETE: To inform the transferee (buyer) that withholding of tax is not required upon my disposition of a U.S. real property interest, the undersigned Seller/Transferor hereby certifies the following: I am NOT a nonresident alien for purposes of U.S. income taxation, My U.S. Taxpayer Identification (Social Security) Number is and My home address is I understand that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement I have made here could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete. Signature Date II. THIS SECTION FOR ENTITY SELLERS: For U.S. tax purposes (including Section 1445), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the Transferor of the property and not the disregarded entity. A. FOR ENTITY SELLERS THAT ARE NOT DISREGARDED ENTITIES: To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by Seller, the undersigned Seller/Transferor hereby certifies: 1. Seller IS NOT a disregarded entity, 2. Seller/Transferor is NOT a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations), _ 3. Seller's/Transferor's Taxpayer Identification Number is O(C,7 ��?`i( , and 4. Seller's/Transferor's office address is � AU�A�' `,% W'�G 'I�,' 6' , t t' �1 � 1 jur(vo. Seller/Transferor understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of Seller/Transferor. Seller/Transferor-- CL' -J c By: Name: \f�� Date: Its:'.�Q� B. FOR ENTITY SELLERS THAT ARE DISREGARDED ENTITIES: To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by Seller, the undersigned Transferor hereby certifies: 1. Seller, [insert name of Seller entity] IS a disregarded entity as defined in 26 CFR 1.1445-2(b)(2)(iii), thus Seller's owner, [insert owner name], is therefore the Transferor; 2. Transferor is NOT a foreign corporation, foreign partnership, foreign trust, or foreign estate, nor a non-resident alien for purposes of U.S. income taxation (as those terms are defined in the Internal Revenue Code and Income Tax Regulations), 3. Transferor's U.S. Taxpayer Identification number is ; and Transferor's address is: [please complete address below] [Insert home address if Transferor is an individual]: [Insert office address if Transferor is an entity: Transferor understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of Transferor. Signature Date APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE :ate: __ I t / to 11f 4A'l ly_ (fir) Aaron C. Harp, City Attorney FANHD Commercial Property Disclosure Reports Disclosure Report Signature Page FirsfAmerican For ORANGE County Nefura(Hazard Disclosures'" Property Address: 707 E BALBOA BLVD APN: 048-135-02 NEWPORT BEACH, ORANGE COUNTY, CA 92661 Report Date: 11/02/2016 ("Property") Report Number: 2005901 Natural Hazard Disclosure ("NHD") Statement and Acknowledgment of Receipt DISCLAIMER: This NHD Summary (a) is not valid unless delivered with the complete FANHD Disclosure Report which transferee must read and acknowledge before close of escrow, and (b) is subject to the Terms and Conditions contained in that complete Disclosure Report. The transferor and his or her agent(s) or a third -party consultant disclose the following information with the knowledge that even though this is not a warranty, prospective transferees may rely on this information in deciding whether and on what terms to purchase the Property. Transferor hereby authorizes any agent(s) representing any principal(s) in this action to provide a copy of this statement to any person or entity in connection with any actual or anticipated sale of the Property. The following are representations made by the transferor and his or her agent(s) or a third -party consultant based on their knowledge and maps drawn by the State. This information is a disclosure and is not intended to be part of any contract between the transferee and the transferor. THIS REAL PROPERTY LIES WITHIN THE FOLLOWING HAZARDOUS AREA(S): A SPECIAL FLOOD HAZARD AREA (Any type Zone "A" or "V") designated by the Federal Emergency Management Agency Yes_ No X Do not know and information not available from local jurisdiction _ AN AREA OF POTENTIAL FLOODING shown on a dam failure inundation map pursuant to Section 8589.5 of the Government Code. Yes_ No X Do not know and information not available from local jurisdiction_ A VERY HIGH FIRE HAZARD SEVERITY ZONE pursuant to Section 51178 or 51179 of the Government Code. The owner of this Property is subject to the maintenance requirements of Section 51182 of the Government Code. Yes_ No X A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISK AND HAZARDS pursuant to Section 4125 of the Public Resources Code. The owner of this Property is subject to the maintenance requirements of Section 4291 of the Public Resources Code. Additionally, it is not the state's responsibility to provide fire protection services to any building or structure located within the wildlands unless the Department of Forestry and Fire Protection has entered into a cooperative agreement with a local agency for those purposes pursuant to Section 4142 of the Public Resources Code. Yes_ No X AN EARTHQUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code. Yes_ No X A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public Resources Code. Yes (Landslide Zone)_ Yes (Liquefaction Zone)A_ No_ Map not yet released by state_ THESE HAZARDS MAY LIMIT YOUR ABILITY TO DEVELOP THE REAL PROPERTY, TO OBTAIN INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER. THE MAPS ON WHICH THESE DISCLOSURES ARE BASED ESTIMATE WHERE NATURAL HAZARDS EXIST. THEY ARE NOT DEFINITIVE INDICATORS OF WHETHER OR NOT A PROPERTY WILL BE AFFECTED BY A NATURAL DISASTER. TRANSFEREE(S) AND TRANSFEROR(S) MAY WISH TO 1QQ&T,AIN PROFESSIONAL ADVICE REGARDING THOSE HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY. 101 lgia Si§ ur of Transferor(s) Date Signature of Transferor(s) Date Signature of Agent Date Signature of Agent Date ElTransferor(s) and their agent(s) represent that the information herein is true and correct to the best of their knowledge as of the date signed by the transferor(s) and agent(s). © Transferor(s) and their agent(s) acknowledge that they have exercised good faith in the selection of a third -party report provider as required in Civil Code Section 1103.7, and that the representations made in this Natural Hazard Disclosure Statement are based upon information provided by the independent third -party disclosure provider as a substituted disclosure pursuant to Civil Code Section 1103.4. Neither transferor(s) nor their agent(s) (1) has independently verified the information contained in this statement and Report or (2) is personally aware of any errors or inaccuracies in the information contained on the statement. This statement was prepared by the provider below: Third -Party Disclosure Provider(s) FIRST AMERICAN PROFESSIONAL REAL ESTATE SERVICES INC. OPERATING THROUGH ITS FANHD DIVISION. Date 02 November 2016 Transferee represents that he or she has read and understands this document. Pursuant to Civil Code Section 1103.8, the representations in this Natural Hazard Disclosure Statement do not constitute all of the transferor's or agent's disclosure obligations in this transaction. Signature of Transferee(s) Date Signature of Transferee(s) Date TRANSFEREE(S) REPRESENTS ABOVE HE/SHE HAS RECEIVED. READ AND UNDERSTANDS THE COMPLETE FANHD DISCLOSURE REPORT DELIVERED WITH THIS SUMMARY: A. Commercial Natural Hazard Disclosure Report, Commercial Tax Report, Commercial Environmental Screening Report. B. Additional Property -specific Statutory Disclosures: Former Military Ordnance Site, Airport Influence Area, Airport Noise, San Francisco Bay Conservation and Development District Jurisdiction (in S.F. Bay counties only). C. Additional County and City Regulatory Determinations as applicable: Airports, Avalanche, Blow Sand, Coastal Zone, Dam/Levee Failure Inundation, Debris Flow, Erosion, Flood, Fault Zone, Fire, Groundwater, Landslide, Liquefaction, Methane Gas, Mines, Naturally Occurring Asbestos, Redevelopment Area, Right to Farm, Runoff Area, Seiche, Seismic Shaking, Seismic Ground Failure, Slope Stability, Soil Stability, Subsidence, TRPA, Tsunami. D. General advisories: Methamphetamine Contamination, Mold, Radon, Endangered Species Act, Abandoned Mines, Oil & Gas Wells, Tsunami Maps (coastal only), Non-residential Building Energy Use. E. Government Guides in Combined Booklet with Report. Refer to Booklet: Commercial Property Owner's Guide to Earthquake Safety. Government Guides are also available on the Company's "Electronic Bookshelf' at http:/hvwww.disclosures.com/. ©2016 - First American Real Estate Disclosures, LLC - 200 Commerce, Suite 100, Irvine, CA 92602 Phone. (800) 527-0027 Fax. (800) 854-9625 Page 1 of 1 APPROVED AS TO FORM: CITY ATTORNEYS OFFICE. Date: ) /vol/ � By; Aaron C. Harp, City Attorney Wooding, Lauren From: Matusiewicz, Dan Sent: Friday, January 06, 2017 2:25 PM To: Wooding, Lauren Subject: Re: Sale of Property - Balboa Theater Since we are exempt, I don't believe it is necessary to fill out E. On Jan 6, 2017, at 12:14 PM, Wooding, Lauren <LWooding@newportbeachca.gov> wrote: Dan, This is a new form that escrow has asked us to complete, can you take a look? Looks like we would just complete 593-C and mark number 8. Do we need to complete form 593-E? Thanks, Lauren Wooding Whitlinger ( Real Property Administrator City of Newport Beach Community Development Department I Building Division 100 Civic Center Drive Newport Beach, CA 92660 T: (949) 644-3236 1 Iwooding@newportbeachca.gov CA Broker License #01943711 www.newportbeachca.gov From: Matusiewicz, Dan Sent: Friday, January 06, 2017 9:17 AM To: Wooding, Lauren Cc: Bello, Bryan; Virany, Rukshana; Wills, Katie Subject: RE: Sale of Property - Balboa Theater What is the ballpark amount we are expecting? From: Wooding, Lauren Sent: Friday, January 6, 2017 8:35 AM To: Matusiewicz, Dan Subject: Sale of Property - Balboa Theater Hi Dan, We are scheduled to close escrow on the sale of the Balboa Theater next Friday, 1/13/2017. Can you provide wire instructions for the proceeds from the sale, please? The funds should be deposited into our CDBG fund. I'll provide a copy of the final closing statement, for our records, upon closing. Please let me know if you have any questions, or would like copies of any of the other documents from the transaction. Thank you, Lauren Wooding Whitlinger I Real Property Administrator City of Newport Beach Community Development Department I Building Division 100 Civic Center Drive ( Newport Beach, CA 92660 T: (949) 644-3236 1 Iwooding@newportbeachca.gov CA Broker License #01943711 www.newportbeachca.gov <SEC-593-C-E Form Inst Only Open Draw-201.pdf> rnia ructions 3-C 3=E 2016 Members of the Franchise Tax Board Betty T. Yee, Chair Jerome E. Horton, Member Michael Cohen, Member This booklet contains: Form 593-C, Real Estate Withholding Certificate Form 593-E, Real Estate Withholding — Computation of Estimated Gain or Loss s of California anchise Tax Board 2016 California Forms 593-C, 593-E, and Instructions Table of Contents Withholding Calculation The two methods used for calculating the withholding amount are the Total General Information............................................................................... 2 Sales Price Method and the Optional Gain on Sale Election Method. The Form 593-C, Real Estate Withholding Certificate.....................................3 withholding amount is determined under the Total Sales Price Method by Instructions for Form 593-C............................................................................4 multiplying the selling price, boot, or installment sale payment by 3 1/3% Form 593-E. Real Estate Withholding — (.0333). The withholding amount is determined under the Optional Gain on Sale Computation of Estimated Gain or Loss....................................................6 Election Method by multiplying the estimated gain by the seller's/transferor's Instructions for Form 593-E............................................................................7 maximum tax rate. Howto Figure Your Basis................................................................................8 How to Get California Tax Information...........................................................9 D Withholding Agent Instructions General Information. A Important Information Installment Sales - The withholding agent is required to report the sale or transfer as an installment sale if the transaction is structured as an installment sale as evidenced by a promissory note. The withholding agent is required to withhold 3 1/31/o (.0333) of the first installment payment. Buyers/Transferees are required to withhold on the principal portion of each subsequent installment payment if the sale of California real property is structured as an installment sale. For more information, get Form 593-I, Real Estate Withholding Installment Sale Acknowledgement. Registered Domestic Partners (RDP) - For purposes of California income tax, references to a spouse, husband, or wife also refer to a California RDP, unless otherwise specified. When we use the initials RDP they refer to both a California registered domestic "partner" and a California registered domestic "partnership;" as applicable. For more information on RDPs, get FTB Pub. 737, Tax Information for Registered Domestic Partners. B Purpose Use this booklet for real estate sales or transfers closing in 2016. Withholding is required when California real estate is sold or transferred. The amount withheld from the seller/transferor is sent to the Franchise Tax Board (FTB) as required by California Revenue and Taxation Code Section 18662. Withholding is not required if any of the following apply: • The total sales price is $100,000 or less. • The property is being foreclosed upon (sold pursuant to a power of sale under a mortgage or deed of trust, sold pursuant to a decree of foreclosure, or by a deed in lieu of foreclosure). • The transferor is a bank acting as a trustee other than a trustee of a deed of trust. • The seller/transferor certifies to an exemption. See the exemptions on Form 593-C, Part II and Part III. The following are excluded from withholding and completing this form: • The United States and any of its agencies or instrumentalities. • A state, a possession of the United States, the District of Columbia, or any of its political subdivisions or instrumentalities. For more information about real estate withholding, get FTB Pub. 1016, Real Estate Withholding Guidelines. If you are a seller/transferor: • Use Form 593-C to determine whether you qualify for a full or partial withholding exemption. Keep this form for five years. • Use Form 593-E to determine your gain or loss on the sale and to calculate the optional gain on sale withholding amount. Keep this form for five years. C Real Estate Withholding Real estate withholding is a prepayment of income tax due from the gain on a sale of California real estate. If the amount withheld is more than the income tax liability, we will refund any available difference between the amounts when you file a tax return after the end of the taxable year. Provide Forms 593, Real Estate Withholding Tax Statement, 593-C, 593-E, and 593-I, with instructions to each seller/transferor as soon as escrow opens. If the sale qualifies for an automatic exemption (the sales price is $100,000 or less, the transferor is a bank acting as a trustee other than a trustee of a deed of trust, or the property is being foreclosed upon), the forms are not required. Make certain you use the correct form and that the year on the form is the year that escrow closed. Instruct the seller/transferor to complete and sign Form 593-C and return it to the REEP by the close of escrow. Incomplete or improperly completed forms may not exempt the seller/transferor from withholding. Form 593-C cannot be accepted after the close of escrow. REEP: If, during the escrow, an individual seller/transferor transfers title to a corporation or partnership and then the corporation or partnership transfers title to the buyer/transferee, then there are two transfers for withholding purposes. Accordingly, two separate Forms 593-C should be completed for with Purposes. The individual must complete one form for the transfer to the corporation or partnership. The corporation or partnership must complete the other form for the transfer to the buyer/transferee. • If the seller/transferor checked any box in Part II, Certifications which fully exempt the sale from withholding, the seller/transferor is exempt from withholding. You are relieved of the real estate withholding requirements if, based on all the information that you have knowledge of, the seller/transferor certifies an exemption from withholding. • If the seller/transferor checked any box in Part III, Certifications that may partially or fully exempt the sale from withholding, the seller/transferor may qualify for a partial or complete withholding exemption. Read the specific line instructions to determine the amount to withhold and any additional requirements. • As to Part III, line 12 box only, the withholding agent is required to check the box if the transaction is structured as an installment sale, as evidenced by a promissory note. As to this box only, the signature of the seller/transferor is not required. The withholding agent should also complete Form 593, Real Estate Withholding Tax Statement, Part III, line 3 and check box B, Installment Sale Payment. • Except as to an installment sale, if the seller/transferor did not check any box in Part II or Part III, the withholding will be 3 1/3% (.0333) of the total sales price, or the optional gain on sale withholding amount from line 5 of Form 593. If the type of transaction is an installment sale, then you are required to withhold 3 1/3% (.0333) of the first installment payment. • Except as to an installment sale, if the seller/transferor does not return the completed Form 593 and Form 593-C by the close of escrow, you are required to withhold 3 1/3% (.0333) of the total sales price. If the type of transaction is an installment sale, then you are required to withhold 3 1/3% (.0333) of the first installment payment. As the REEP, you are required to withhold and complete Form 593 for each seller/transferor that was withheld upon. Give one copy of Form 593 to the seller/transferor. After the close of the month, the REEP mails one copy of all of the Forms 593 completed during the month and any Form 593-I and promissory note, to the FTB with the total amount withheld for all transactions that closed during the month. However, the REEP has the option to send in one payment and the related Form 593, and any Form 593-I and promissory note, if applicable, for each escrow. Regardless of whether you send one payment for the month or one payment for each escrow, Forms 593, any required Form 593-I and promissory note, and the withholding payment are due to the FTP by the 20th day of the month following Although the law requires the buyer/transferee to withhold, the the month you closed escrow. As the REEP remitting the withholding to the FTB, buyer/transferee can request the Real Estate Escrow Person (REEP) to do the you must include your name and telephone number as a contact for the withholding. A REEP is any person involved in closing the real estate remittance. transaction which includes any attorney, escrow company, or title company, or Do not send Form 593-C to the FTB. The REEP retains this form for a minimum any other person who receives and disburses payment and remits withholding of five years and must provide it to the FTB upon request. to the FTB for the sale of real property. Page 2 Form 593-C/Form 593-E Booklet 2015 2016 Instructions for Form 593-C Real Estate Withholding Certificate References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and to the California Revenue and Taxation Code (R&TC). General Information In general, for taxable years beginning on or after January 1, 2015, California law conforms to the Internal Revenue Code (IRC) as of January 1, 2015. However, there are continuing differences between California and federal law. When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level. For more information, go to ftb.ca.gov and search for conformity. Additional information can be found in FTB Pub. 1001, Supplemental Guidelines to California Adjustments, the instructions for California Schedule CA (540 or 540NR), and the Business Entity tax booklets. Like -Kind Exchanges — For taxable years beginning on or after January 1, 2014, California requires taxpayers who exchange property located in California for like -kind property located outside of California, and meet all of the requirements of the IRC Section 1031, to file an annual information return with the Franchise Tax Board (FTB). For more information, get form FTB 3840, California Like -Kind Exchanges, or go to ftb.ca.gov and search for like kind. Purpose Use Form 593-C, Real Estate Withholding Certificate, to determine whether you qualify for a full or partial withholding exemption. Qualifying for an exemption from withholding or being withheld upon does not relieve you of your obligation to file a California income tax return and pay any tax due on the sale of California real estate. You may be assessed penalties if: • You do not file a tax return. • You file your tax return late. • The amount of withholding does not satisfy your tax liability. The seller/transferor must submit this form before the close of escrow to prevent withholding on the transaction. After escrow has closed, amounts withheld may be recovered only by claiming the withholding as a credit on the appropriate year's tax return. How to Claim the Withholding To claim the withholding credit, report the sale or transfer as required and enter the amount from line 5 of Form 593, Real Estate Withholding Tax Statement, on your California tax returns as withholding from Form(s) 592- 6 or 593. If your marital or filing status has changed after escrow closed and before filing your California tax return, contact us at 888.792.4900 prior to filing your tax return for instructions on how to claim your withholding credit. Claim your withholding credit on one of the following: • Form 540, California Resident Income Tax Return • Form 540NR Long, California Nonresident or Part -Year Resident Income Tax Return • Form 541, California Fiduciary Income Tax Return • Form 100, California Corporation Franchise or Income Tax Return • Form 1005, California S Corporation Franchise or Income Tax Return • Form 100W, California Corporation Franchise or Income Tax Return — Water's -Edge Filers • Form 109, California Exempt Organization Business Income Tax Return • Form 565, Partnership Return of Income • Form 568, Limited Liability Company Return of Income Specific Instructions Private Mail Box (PMB) — Include the PMB in the address field. Write "PMB" first, then the box number. Example: 111 Main Street PMB 123. Foreign Address — Follow the country's practice for entering the city, county, province, state, country, and postal code, as applicable, in the appropriate boxes. Do not abbreviate the country name. Part I — Seller/Transferor Enter the name, tax identification number, and address of the seller/transferor. If the seller/transferor does not provide a tax identification number, then Form 593-C is void, and withholding is required. Note: If you choose to provide a copy of Form 593-C to the buyer/transferee, delete the seller's/transferor's tax identification number on the buyer's/transferee's copy. Page 4 Form 593-C/Form 593-E Booklet 2015 If the seller/transferor is an individual, enter the social security number (SSN) or individual taxpayer identification number (ITIN). If the sellers/transferors are spouses/registered domestic partners (RDPs) and plan to file a joint return, enter the name and SSN or MN for each spouse/RDP. Otherwise, do not enter information for more than one seller/transferor. Instead, complete a separate Form 593-C for each seller/transferor. If you do not have an SSN because you are a nonresident or a resident alien for federal tax purposes, and the Internal Revenue Service (IRS) issued you an ITIN, enter the ITIN in the space provided for the SSN. An ITIN is a tax processing number issued by the IRS to individuals who have a federal tax filing requirement and do not qualify for an SSN. It is a nine -digit number that always starts with the number 9. If the seller/transferor is a business, enter the business name in the business name field along with the federal employer identification number (FEIN), CA Corporation number (CA Corp no.), or CA Secretary of State (CA SOS) file number. If the seller/transferor is a grantor trust, enter the grantor's individual name and SSN. For tax purposes, the grantor trust is disregarded for tax purposes and the individual seller/transferor must report the sale and claim the withholding on their individual tax return. If the trust was a grantor trust that became irrevocable upon the grantor's death, enter the name of the trust and the trust's FEIN. Do not enter the decedent's or trustee's name or SSN. If the seller/transferor is a non -grantor trust, enter the name of the trust and the trust's FEIN. Do not enter trustee information. If the seller/transferor is a single member limited liability company (SMLLC), enter the name and tax identification number of the single member. For all other non -individual sellers/transferors, enter the FEIN, CA Corp no., or CA SOS file number. Ownership Percentage Enter your ownership percentage rounded to two decimal places (e.g. 66.67%). If you are on the title for incidental purposes and you have no financial ownership, enter 0.00 and skip to Seller/Transferor Signature. You will not be withheld upon. Examples of sellers/transferors who are on title for incidental purposes are: • Co-signers on title (e.g., parents co-signed to help their child qualify for the loan). • Family members on title to receive property upon the owner's death. Property Address Enter the address (or parcel number and county) of the CA real property transferred. Part II — Certifications Which Fully Exempt Withholding Line 1— Principal Residence To qualify as your principal residence under IRC Section 121, you (or the decedent) generally must have owned and lived in the property as your main home for at least two years during the five-year period ending on the date of sale. Military and Foreign Service, get FTB Pub. 1032, Tax Information for Military Personnel. You can have only one main home at a time. If you have two homes and live in both of them, the main home is the one you lived in most of the time. There are exceptions to the two-year rule if the primary reason you are selling the home is for a change in the place of employment, health, or unforeseen circumstances such as death, divorce or termination of registered domestic partnership, or loss of job, etc. For more information about what qualifies as your principal residence or exceptions to the two- year rule, get federal Publication 523, Selling Your Home. To get federal publications, go to irs.gov, or call 800.829.3676. If only a portion of the property qualifies as your principal residence, a second Form 593-C will need to be completed to certify an exemption on the portion not used as a principal residence. The allocation method should be the same as the seller/transferor used to determine depreciation. Line 2 - Property last used as your principal residence When completing Form 593-C as the single member of a disregarded LLC, If the property was last used as the seller's/transferor's, or decedent's write on the bottom of the form that the information on the form is for the principal residence within the meaning of IRC Section 121 without regard to single member of the LLC, so the Real Estate Escrow Person (REEP) will the two-year time period, no withholding is required. If the last use of the understand why it is different from the recorded title holder. property was as a vacation home, second home, or rental, you do not The single member's information If the single member is: Complete Form 593-C using: qualify for the exemption. You must have lived in the property as your main home. An individual The individual's information If you have two homes and live in both of them, the main home is the one you lived in most of the time. Line 3 - Loss or Zero Gain You have a loss or zero gain for California income tax purposes when the amount realized is less than or equal to your adjusted basis. You must complete Form 593-E, Real Estate Withholding - Computation of Estimated Gain or Loss, and have a loss or zero gain on line 16 to certify that the transaction is fully exempt from withholding. You may not certify that you have a net loss or zero gain just because you do not receive any proceeds from the sale or because you feel you are selling the property for less than what it is worth. Line 4 - Involuntary Conversion The property is being involuntarily or compulsorily converted when both of the following apply: • The California real property is transferred because it was (or threatened to be) seized, destroyed, or condemned within the meaning of IRC Section 1033. • The seller/transferor intends to acquire property that is similar or related in service or use in order to be eligible for nonrecognition of gain for California income tax purposes. Get federal Publication 544, Sales and Other Dispositions of Assets, for more information about involuntary conversions. Line 5 - Non -recognition Under IRC Section 351 or 721 The transfer must qualify for nonrecognition treatment under IRC Section 351 (transferring to a corporation controlled by transferor) or IRC Section 721 (contributing to a partnership in exchange for a partnership interest). Line 6 - Corporation A corporation has a permanent place of business in this state when it is organized and existing under the laws of this state or it has qualified through the CA SOS to transact intrastate business. A corporation not qualified to transact intrastate business (such as a corporation engaged exclusively in interstate commerce) will be considered as having a permanent place of business in this state only if it maintains an office in this state that is permanently staffed by its employees after the sale. S corporations must withhold on nonresident S corporation shareholders. Get FTB Pub. 1017, Resident and Nonresident Withholding Guidelines, for more information. Line 7 - Partnership or Limited Liability Company (LLC) Partnerships and LLCs are required to withhold on nonresident partners and members. For more information, get FTB Pub.1017. Withholding is not required if the title to the property transferred is recorded in the name of a California partnership or it is qualified to do business in California. Withholding is not required if the title to the property transferred is in the name of an LLC, and the LLC meets both of the following: • It is classified as a partnership for federal and California income tax purposes. • It is not a SMLLC that is disregarded for federal and California income tax purposes. If the LLC meets these conditions, the LLC must still withhold on nonresident members. Get FTB Pub. 1017 for more information. If the SMLLC is classified as a corporation for federal and California income tax purposes, then the seller/transferor is considered a corporation for withholding purposes. Refer to Line 6. If the LLC is an SMLLC that is disregarded for federal and California income tax purposes, then that single member is considered the seller/transferor and title to the property is considered to be in the name of the single member for withholding purposes. Line 8 - Tax -Exempt Entity Withholding is not required if the seller/transferor is tax-exempt under either California or federal law (e.g., religious, charitable, educational, not for profit organizations, etc.). Line 9 - Insurance Company, Individual Retirement Account, Qualified Pension or Profit -Sharing Plan, or Charitable Remainder Trust Withholding is not required when the seller/transferor is an insurance company, individual retirement account, qualified pension or profit-sharing plan, or a charitable remainder trust. Part III - Certifications That May Partially or Fully Exempt the Sale From Withholding Complete Part III only if you did not meet any of the exemptions in Part II. Line 30 - Simultaneous Exchange If the California real property is part of a simultaneous like -kind exchange within the meaning of IRC Section 1031, the transfer is exempt from withholding. However, if the seller/transferor receives money or other property (in addition to property that is a part of the like -kind exchange) exceeding $1,500 from the sale, the withholding agent must withhold. Line 11 - Deferred Exchange If the California real property is part of a deferred like -kind exchange within the meaning of IRC Section 1031, the sale is exempt from withholding at the time of the initial transfer. However, if the seller/transferor receives money or other property (in addition to property that is a part of the like -kind exchange) exceeding $1,500 from the sale, the withholding agent must withhold. The intermediary or accommodator must withhold on all cash or cash equivalent (boot) it distributes to the seller/transferor if the amount exceeds $1,500. If the exchange does not take place or if the exchange does not qualify for nonrecognition treatment, the intermediary or accommodator must withhold 3 1/3% (.0333) of the total sales price. Line 12 - Installment Sale The withholding agent is required to report as an installment sale if the transaction is structured as an installment sale as evidenced by a promissory note. The withholding agent is required to withhold 3 1/3% (.0333) of the first installment payment. The buyer/transferee is required to withhold on the principal portion of each subsequent installment payment if the sale is structured as an installment sale. When the withholding amount on the first installment principal payment is sent to the FTB, the FTB must also receive a completed Form 593-I, Real Estate Withholding Installment Sale Acknowledgement, a completed Form 593, and a copy of the promissory note. Seller/Transferor Signature You must sign this form and return it to your REEP by the close of escrow for it to be valid. Otherwise, the withholding agent must withhold the full 3 1/3% (.0333) of the total sales price or the optional gain on sale withholding amount from line 5 of Form 593 that is certified by the seller/transferor only for the optional gain on sale election. Penalty - Any seller/transferor who, for the purpose of avoiding the withholding requirements, knowingly executes a false certificate is liable for a penalty of $1,000 or 20% of the required withholding amount, whichever is greater. Form 593-C/Form 593-E Booklet 2015 Page 5 A corporation The corporation's information A partnership The partnership's information An LLC The single member's information Line 8 - Tax -Exempt Entity Withholding is not required if the seller/transferor is tax-exempt under either California or federal law (e.g., religious, charitable, educational, not for profit organizations, etc.). Line 9 - Insurance Company, Individual Retirement Account, Qualified Pension or Profit -Sharing Plan, or Charitable Remainder Trust Withholding is not required when the seller/transferor is an insurance company, individual retirement account, qualified pension or profit-sharing plan, or a charitable remainder trust. Part III - Certifications That May Partially or Fully Exempt the Sale From Withholding Complete Part III only if you did not meet any of the exemptions in Part II. Line 30 - Simultaneous Exchange If the California real property is part of a simultaneous like -kind exchange within the meaning of IRC Section 1031, the transfer is exempt from withholding. However, if the seller/transferor receives money or other property (in addition to property that is a part of the like -kind exchange) exceeding $1,500 from the sale, the withholding agent must withhold. Line 11 - Deferred Exchange If the California real property is part of a deferred like -kind exchange within the meaning of IRC Section 1031, the sale is exempt from withholding at the time of the initial transfer. However, if the seller/transferor receives money or other property (in addition to property that is a part of the like -kind exchange) exceeding $1,500 from the sale, the withholding agent must withhold. The intermediary or accommodator must withhold on all cash or cash equivalent (boot) it distributes to the seller/transferor if the amount exceeds $1,500. If the exchange does not take place or if the exchange does not qualify for nonrecognition treatment, the intermediary or accommodator must withhold 3 1/3% (.0333) of the total sales price. Line 12 - Installment Sale The withholding agent is required to report as an installment sale if the transaction is structured as an installment sale as evidenced by a promissory note. The withholding agent is required to withhold 3 1/3% (.0333) of the first installment payment. The buyer/transferee is required to withhold on the principal portion of each subsequent installment payment if the sale is structured as an installment sale. When the withholding amount on the first installment principal payment is sent to the FTB, the FTB must also receive a completed Form 593-I, Real Estate Withholding Installment Sale Acknowledgement, a completed Form 593, and a copy of the promissory note. Seller/Transferor Signature You must sign this form and return it to your REEP by the close of escrow for it to be valid. Otherwise, the withholding agent must withhold the full 3 1/3% (.0333) of the total sales price or the optional gain on sale withholding amount from line 5 of Form 593 that is certified by the seller/transferor only for the optional gain on sale election. Penalty - Any seller/transferor who, for the purpose of avoiding the withholding requirements, knowingly executes a false certificate is liable for a penalty of $1,000 or 20% of the required withholding amount, whichever is greater. Form 593-C/Form 593-E Booklet 2015 Page 5 TAXABLE YEAR CALIFORNIA FORM 2016 Real Estate Withholding Certificate 593-C Part I — Seller/Transferor Return this form to your escrow company. Name SSN or ITIN The City of Newport Beach a charter city and municipal corporation Spouse's/RDP's name (if jointly owned) Spouse's/RDP's SSN or ITIN (if jointly owned) Address (apt./ste., room, PO Box, or PMB no.) ®FEIN ❑ CA Corp no. ❑ CA SOS file no. Attn: City Manager 100 Civic Center Drive P.O. Box 1768 City (If you have a foreign address, see instructions.) State ZIP code Ownership percentage Newport Beach I CA 92658 ►C3 % Property address (if no street address, provide parcel number and county) �y RV 707 East Balboa Boulevard Newport Beach CA 92661 To determine whether you qualify for a full or partial withholding exemption, check all boxes that apply to the property being sold or transferred. (See instructions) Part II — Certifications which fully exempt the sale from withholding: 1. ❑ The property qualifies as the seller's/transferor's (or decedent's, if sold by the decedent's estate or trust) principal residence within the meaning of Internal Revenue Code (IRC) Section 121. 2. ❑ The seller/transferor (or decedent, if sold by the decedent's estate or trust) last used the property as the seller's/transferor's(decedent's) principal residence within the meaning of IRC Section 121 without regard to the two-year time period. 3. ❑ The seller/transferor has a loss or zero gain for California income tax purposes on this sale. To check this box you must complete Form 593-E, Real Estate Withholding -Computation of Estimated Gain or Loss, and have a loss or zero gain on line 16. 4. ❑ The property is being compulsorily or involuntarily converted and the seller/transferor intends to acquire property that is similar or related in service or use to qualify for nonrecognition of gain for California income tax purposes under IRC Section 1033. 5. ❑ The transfer qualifies for nonrecognition treatment under IRC Section 351 (transfer to a corporation controlled by the transferor) or IRC Section 721 (contribution to a partnership in exchange for a partnership interest). 6. ❑ The seller/transferor is a corporation (or a limited liability company (LLC) classified as a corporation for federal and California income tax purposes) that is either qualified through the California Secretary of State (SOS) or has a permanent place of business in California. 7. ❑ The seller/transferor is a California partnership or a partnership qualified to do business in California (or an LLC that is classified as a partnership for federal and California income tax purposes and is not a single member LLC that is disregarded for federal and California income tax purposes). 8. IVI The seller/transferor is a tax-exempt entity under California or federal law. VI 9. The seller/transferor is an insurance company, individual retirement account, qualified pension/profit sharing plan, or charitable remainder trust. Part III — Certifications that may partially or fully exempt the sale from withholding: Real Estate Escrow Person (REEP): See instructions for amounts to withhold. io. ❑ The transfer qualifies as a simultaneous like -kind exchange within the meaning of IRC Section 1031. 11. ❑ The transfer qualifies as a deferred like -kind exchange within the meaning of IRC Section 1031. 12. ❑ The transfer of this property is an installment sale where the buyer/transferee is required to withhold on the principal portion of each installment payment. Copies of Form 593-I, Real Estate Withholding Installment Sale Acknowledgement, and the promissory note are attached. Sever To learn about your privacy rights, how we may use your information, and the consequences for not providing the requested information, go to ftb.ca.gov and search for privacy notice. To request this notice by mail, call 800.852.5711. Under penalties of perjury, I hereby certify that the information provided above is, to the best of my knowledge, true and correct. If conditions change, I will promptly inform the withholding agent. I understand that I must retain this form in my records for 5 years and that the Franchise Tax Board may review relevant escrow documents to ensure withholding compliance. Completing this form does not exempt me from filing a California income or franchise tax return to report this sale. Seller's/Transferor's Name and TitleD& � q- C a'A Seller's/Transferor's Signa Date Spouse's/RDP's Name ` "I Spouse's/RDP's Signature Date Seller/ If you checked any box in Part II, you are exempt from real estate withholding. If you checked any box in Part III, you may qualify for a partial or complete withholding exemption. Transferor Except as to an installment sale, if the seller/transferor did not check any box in Part II or Part III of Form 593-C, the withholding will be 3 1/3% (.0333) of the total sales price or the optional gain on sale withholding amount from line 5 of Form 593, Real Estate Withholding Tax Statement. If the seller/transferor does not return the completed Form 593 and Form 593-C by the close of escrow, the withholding will be 3 1/3% (.0333) of the total sales price, unless the type of transaction is an installment sale. If the transaction is an installment sale, the withholding will be 3 1/3% (.0333) of the first installment payment. If you are withheld upon, the withholding agent should give you one copy of Form 593. Attach a copy to the lower front of your California income tax return and make a copy for your records. 0 —1 7131163 I — Form 593-C C2 2015 M 2016 Instructions for Form 593-E Real Estate Withholding - Computation of Estimated Gain or Loss References in these instructions are to the -Internal -Revenue Code (IRC) as of January 1, 2015, and to the California Revenue and Taxation Code (R&TC). General Information In general, for taxable years beginning on or after January 1, 2015, California law conforms to the Internal Revenue Code (IRC) as of January 1, 2015. However, there are continuing differences between California and federal law. When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level. For more information, go to ftb.ca.gov and search for conformity. Additional information can be found in FTB Pub. 1001, Supplemental Guidelines to California Adjustments, the instructions for California Schedule CA (540 or 540NR), and the Business Entity tax booklets. Purpose Use Form 593-E, Real Estate Withholding - Computation of Estimated Gain or Loss, to estimate the amount of your gain or loss for withholding purposes and to calculate an optional gain on sale withholding amount. This form is used for sales closing in 2016. The seller/transferor completes this form. Title and real estate escrow persons (REEP) and exchange accommodators are not authorized to provide legal or accounting advice for purposes of determining withholding amounts. Sellers/transferors are strongly encouraged to consult with a tax professional for this purpose. Optional Gain on Sale Withholding Amount is the withholding amount calculated when the optional gain on sale election has been made by the seller/transferor, which includes providing a signature under penalty of perjury. The seller/transferor makes the election and provides the signature on Form 593-E. The withholding amount is calculated by multiplying the seller's/transferor's applicable tax rate by the estimated gain determined on Form 593-E. You may use estimates when you complete this form, but the estimates must not result in the calculation of a loss when you actually have a gain. Any seller/transferor who, for the purpose of avoiding the withholding requirements, knowingly executes a false certificate is liable for a penalty of $1,000 or 20% of the required withholding amount, whichever is greater. This form is signed under penalty of perjury. The seller/transferor must keep this form for 5 years and provide it to the Franchise Tax Board (FTB) upon request. However, the seller/transferor is not required to provide this form to the withholding agent or buyer/transferee. Specific Instructions Private Mail Box (PMB) - Include the PMB in the address field. Write "PMB" first, then the box number. Example: 111 Main Street PMB 123. Foreign Address - Follow the country's practice for entering the city, county, province, state, country, and postal code, as applicable, in the appropriate boxes. Do not abbreviate the country name. Part I- Seller/Transferor Enter the name, tax identification number, and address of the seller/transferor If the seller/transferor is an individual, enter the social security number (SSN) or individual taxpayer identification number (ITIN),If the sellers/transferors are spouses/registered domestic partners (RDPs) and plan to file a joint return, enter the name and SSN or ITIN for each spouse/RDP. Otherwise, do not enter information for more than one seller/transferor. Part II - Computation Line 1 - Selling Price The selling price is the total amount you will receive for your property. It includes money, as well as, all notes, mortgages, or other debts assumed by the buyer as part of the sale, plus the fair market value of any other property or any services you receive. Line 2 - Selling Expenses Selling expenses include commissions, advertising fees, legal fees, and loan charges that will be paid by the seller/transferor, such as loan placement fees or points. Line 3 - Amount Realized The amount realized is the selling price minus the selling expenses. Line 4 - Purchase Price If you acquired this property by purchase, enter your purchase price. Your purchase price includes the down payment and any debt you incurred; such as a first or second mortgage or promissory notes you gave the seller/transferor in payment for the property. If you acquired the property by gift, inheritance, exchange, or any way other than purchase, see How to Figure Your Basis. Line 5 - Seller/Transferor-Paid Points Points are charges paid to obtain a loan. They may also be called loan origination fees, maximum loan charges, loan discount, or discount points. If the seller/transferor paid points for you when you acquired the property, enter the amount paid by the seller/transferor on your behalf on line 5, unless you already subtracted this item to arrive at the amount for line 4. Line 6 - Depreciation Enter the amount of depreciation you deducted, or could have deducted, on your California income tax return for business or investment use of the property under the method of depreciation you chose. If you took less depreciation on your tax return than you could have under the method chosen, you must enter the amount you could have taken under that method. If you did not take a depreciation deduction, enter the full amount of depreciation you could have taken. Get federal Publication 946, How to Depreciate Property, for more information. If you do not know how much depreciation you deducted or were allowed, you can make an estimate of the amount of depreciation (for withholding purposes only). To estimate the depreciation, divide the purchase price plus the cost of additions and improvements by 27.5 and multiply that by the number of years you used the property for business use (up to 27.5 years). Example: Mary bought a house 20 years ago for $150,000 and has used it as a rental property for the last 18 years. Prior to renting the house, she added a pool which cost her $25,000. Mary's depreciation is estimated as follows: Cost $150,000 Plus additions 25.000 Total 175,000 Divided by 27.5 = 6,364 Multiply by 18 years = $114,552 Mary's estimated depreciation to enter on line 6 is $114,552. Line 7 - Other Decreases to Basis Include any other amounts that decrease your basis, such as: • Casualty or theft loss deductions and insurance reimbursements. • Energy credits claimed for the cost of energy improvements added to your basis. • Payments received for granting an easement or right-of-way. Line 10 - Additions and Improvements These add to the value of your property, prolong its useful life, or adapt it to new uses. Examples include room additions, landscaping, new roof, insulation, new furnace or air conditioner, remodeling, etc. The cost of repairs may not be included unless they are part of an extensive remodeling or restoration project. Do not include any additions or improvements on line 10 that were included on line 4. Line 11 - Other Increases to Basis Include the amounts paid for any other items that increase the basis of the property, such as: • Settlement fees and closing costs you incurred when you bought the property. • The amount you paid for special assessments for items such as water connections, paving roads, and building ditches. • The cost of restoring damaged property from a casualty loss, or cost of extending utility service lines to the property. Line 14 - Passive Activity Losses You may only use suspended passive activity losses that directly relate to the property sold. Other losses such as net operating losses, capital loss carry- forwards, stock losses, and passive activity losses from other properties cannot be used. Form 593-C/Form 593-E Booklet 2015 Page 7 Line 16 — Estimated Gain or Loss on Sale If you have a zero gain or loss, check the box on line 3 of Form 593-C, Real Estate Withholding Certificate. Complete and sign Form 593-C and give it to your REEP. You will not be subject to withholding on this sale. Keep Form 593-E for 5 years to document your calculations and provide to the FTB if requested. If you have a gain, this is your estimated amount of gain on the sale of your California property. Go to line 17. Line 17 — Optional Gain on Sale Withholding Amount Multiply the amount on line 16 by the tax rate for the filing type selected and enter the amount on line 17. You may compare this amount to the How to Figure Your Basis withholding amount on the total sales price shown on line 18. If you elect the optional gain on sale withholding amount on line 17, check the appropriate box on line 4 (Boxes B -G) for the Optional Gain on Sale Election, on Form 593, Real Estate Withholding Tax Statement, then transfer the amount on line 17 to Form 593, line 5. Sign Form 593 to certify the election. Keep Form 593-E for 5 years to document your calculations and provide to the FTB upon request. Line 18 — Total Sales Price Withholding Amount Multiply the selling price on line 1 by 3 1/3% (.0333) and enter the amount on line 18. If you select the standard withholding amount on line 18, check Box A on line 4 of Form 593, and transfer the amount on line 18 to Form 593, line 5. The cost or purchase price of property is usually its basis for figuring gain or loss from its sale or other disposition. However, if you acquired the property by gift, inheritance, exchange, or in some way other than purchase, you must use a basis other than its cost. The following instructions only reflect the general rules. Exceptions may apply. Get federal Publication 551, Basis of Assets, for more information. Sellers/Transferors are strongly encouraged to consult with a tax professional for this purpose. How Property Was Received How to Figure Your Basis Property was received as a gift Usually, your basis is the donor's adjusted basis at the time of the gift. Enter the donor's adjusted basis on line 4. Then complete the rest of the form (except line 5) with your information after you received the property. If the fair market value (FMV) of the property at the time of the gift was less than the donor's adjusted basis, get federal Publication 551 to determine your basis. Property was inherited from Usually, your basis is the FMV at the date of the individual's death. You can get that valuation from the someone other than your probate documents, or if there was no probate, use the appraised value at the date of death. Enter the spouse/RDP FMV on line 4. Then complete the rest of the form (except line 5) with your information after you received the property. If you or your spouse/RDP originally gave the property to the decedent within one year of the decedent's death, get federal Publication 551 to determine your basis. You owned the property Your basis is the FMV of the total property at the date of your spouse's/RDP's death. Enter the FMV on (as community property) with line 4. Then complete the rest of the form (except line 5) with your information after the date of death. your spouse/RDP who died You owned the property (in joint Your basis is the sum of: 1) the FMV of your spouse's/RDP's half of the property at the date of your tenancy) with your spouse/RDP spouse's/RDP's death; and, 2) the existing basis of your half of the property at the date of your who died spouse's/RDP's death. Enter the sum on line 4. Then complete the rest of the form (except line 5) with your information after the date of death. Property received from your Usually, your basis is the same as it would have been without this transfer. Complete Form 593-E as if spouse/RDP in connection to your you had been the only owner before and after the transfer. divorce/termination of registered If your spouse/RDP transferred the property to you before July 18, 1984, get federal Publication 551 to domestic partnership determine your basis. Property received in exchange Your basis will depend on whether you received the property in a nontaxable, taxable, or partially taxable for other property exchange. Get federal Publication 551 to determine your basis. Enter your basis on line 4. Then complete the rest of the form. However, do not include any amounts on line 5 through line 10 that you included on line 4. You built the house Add the purchase price of the land and the cost of the building. Enter the total on line 4 and complete (or other improvements) the rest of the form. on the property being sold If you deferred the gain from a previous home to this property, get federal Publication 551. You received the property in a Enter your basis in the property after the foreclosure on line 4. (You may need to get a tax professional foreclosure to help you with this calculation). Then complete the rest of the form (except for line 5) with your information after the foreclosure. Page 8 Form 593-C/Form 593-E Booklet 2015 TAXABLEYEAR Real Estate Withholding — CALIFORNIA FORM 2016 Computation of Estimated Gain or Loss 593-E (You are required to complete this form if you claim an exemption due to a loss or zero gain or if you elect an optional gain on sale withholding amount.) Part I — Seller/Transferor Name SSN or ITIN Spouse's/RDP's name (if jointly owned) Spouse's/RDP's SSN or ITIN (if jointly owned) Address (apt./ste., room, PO Box, or PMB no.) =FEIN =CA Corp. No. =CA SOS file no. City (If you have a foreign address, see instructions.) 2 State ZIP code Property address (if no street address, provide parcel number and county) 4 Part II - Computation 1 Selling price ............................................................................................................................................................................................................. 1 2 Selling expenses ............... 2 3 ........ Amount realized. Subtract line 2 from line 1 3 4 Enter the price you paid to purchase the property (If you acquired the property other than by purchase, see instructions, How to Figure Your Basis) ....................................... 4 ................................................................................ 5 . Seller/Transferor-paid points .......... 5 6 Depreciation............................................................ 6 7 Other decreases to basis 7 .......................................................................................................... 8 Total decreases to basis.Add line 5 through line 7 8 .,............................................................ 9 Subtract line 8 from line 49 ................... _. _._ — _ .................. 10 10 Cost of additions and improvements 10 11 Other increases to basis11 ............................................................................................................ 12 Total increases to basis. Add line 10 and line 1112 ........................................... __ ................. ....... ........................................ 13 Adjusted basis. Add line 9 and line 12 .. ... ........ ....................................................................................... 13 14 Enter any suspended passive activity losses from this property ................................................. 14 15 Add line 13 and line 14 15 16 ................................................................................................................................................................................................. Estimated gain or loss on sale. Subtract line 15 from line 3 and enter the amount here. If you have a loss or zero gain, skip lines 17 and 18. Complete the Seller/Transferor Signature area below and check the box on Form 593-C, Real Estate Withholding Certificate, PartII line 3. If you have a gain, go to line 17 ...............»........»._..............................»...........»...............................................16 17 ................................ Optional gain on sale withholding amount. Check the applicable box for the filing type. Q Individual 12.3% Q Corporation 8.84% Bank and Financial Corporation 10.84% Non -California Partnership 12.3% F—] S Corporation 13.8% ❑ Financial S Corporation 15.8% Multiply the amount on line 16 by the tax rate for the filing type selected above and enter the result on line 17. This is the optional gain on sale withholding amount. If you elect the optional gain on sale withholding amount on line 17, get Form 593, Real Estate Withholding Tax Statement, and check the appropriate box on line 4 (Boxes B -G) for the Optional Gain on Sale Election, and transfer the amount on line 17 to Form 593, line 5. Sign Form 593 to certify the election 17 18 Total sales price withholding amount. Multiply the selling price on line 1 by 3 1/3% (.0333) and enter the amount on line 18. This is the total sales price withholding amount. If you select the total sales price withholding amount on line 18, check Box A "3 1/3% (.0333) x Total Sales Price" on line 4 of Form 593, and transfer the amount on line 18 to Form 593, line 5 ..................................................................................... ...,.18 Seller/Transferor Signature Title and escrow persons and exchange accommodators are not authorized to provide legal or accounting advice for purposes of determining withholding amounts. Transferors are strongly encouraged to consult with a competent tax professional for this purpose. To learn about your privacy rights, how we may use your information, and the consequences for not providing the requested information, go to ftb.ca.gov and search for privacy notice. To request this notice by mail, call 800.852.5711. Under penalties of perjury, I hereby certify that the information provided above is, to the best of my knowledge, true and correct. If conditions change, I will promptly inform the withholding agent. I understand that I must retain this form in my records for 5 years and that the Franchise Tax Board may review relevant escrow documents to ensure withholding compliance. Completing this form does not exempt me from filing a California income or franchise tax return to report this sale. Seller's/Transferor's Name It is unlawful to forge a spouse's/RDP's signature. Spouse's/RDP's Name (if jointly owned) Seller's/Transferor's Signature Date Spouse's/RDP's Signature (if jointly owned) Date 7151163 Form 593-E C2 2015 How to Get California Tax Information Additional Information For additional information or to speak to a representative regarding these forms, call the Withholding Services and Compliance telephone service at: 888.792.4900, or 916.845.4900 FAX 916.845.9512 Or write to: WITHHOLDING SERVICES AND COMPLIANCE FRANCHISE TAX BOARD PO BOX 942867 SACRAMENTO CA 94267-0651 You can download, view, and print California tax forms and publications at ftb.ca.gov. Or to get forms by mail write to: TAX FORMS REQUEST UNIT FRANCHISE TAX BOARD PO BOX 307 RANCHO CORDOVA CA 95741-0307 Internet and Telephone Assistance Website: ftb.ca.gov Telephone: 800.852.5711 from within the United States 916.845.6500 from outside the United States TTY/TDD: 800.822.6268 for persons with hearing or speech impairments Asistencia Por Internet y Telefono Sitio web: ftb.ca.gov Telefono: 800.852.5711 dentro de los Estados Unidos 916.845.6500 fuera de los Estados Unidos TTY/TDD: 800.822.6268 para personas con discapacidades auditivas o del habla Form 593-C/Form 593-E Booklet 2015 Page 9 18500 Von Karman Ave, Suite 600 1, ,4 first American Irvine, CA 92612 Title Insurance Company NATIONAL COMMERCIAL SERVICES PROCEEDS DISBURSEMENT Dated: 11/02/2016 The City of Newport Beach, a charter city and municipal corporation Attn: City Manager 100 Civic Center Drive P.O. Box 1768 Newport Beach, CA 92658 Order Number: NCS-820331-SA1 Property Address: 707 East Balboa Boulevard, Newport Beach, CA 92661 Buyer/Borrower(s): Balboa Theater Company, LLC Seller(s): The City of Newport Beach, a charter city and municipal corporation The undersigned seller(s) or borrower(s) request that the proceeds from the sale or refinance of the above captioned property be sent in the following manner. Please select one and complete if necessary. 1. _ Pick-up at First American Title Insurance Company National Commercial Services, 18500 Von Karman Ave, Suite 600, Irvine, CA 92612 2. _ Mail to the following address: 3. _ Overnight via express mail service to the following address: 4. X Wire proceeds to: �.� y '`�0 t � G � A o Bank Name & Address Bank ABA Routing Number Bank Account Number 5. Other: Seller(s) Page 1 of 2 Bank Account Name The City of Newport Beach, a charter city and municipal corporation By: �— Nam Y)0,14-,� Title: Ca+t,'i Date: 1 J_!±OJ20-)4 Page 2 of 2 CITY OF NEWPORT BEACH Wire Transfer Instructions Bank: Address of Receiving Bank: ABA Routing Number: Account Name: Account Number: Bank Official to Contact: Bank Official Phone Number: Bank Official FAX Number Email: Account Type: Checking Primary City Contact: Phone: Fax: Mail: Alternate City Contact: Phone: Fax: Email: City National Bank 1811 Von Karman Ave #120 Irvine, CA 92612 122016066 City of Newport Beach — General 023-696835 Miguel Rivera 213.673.9381 213.673.9462 miguel.rivera@cnb.com Bryan Bello, Fiscal Specialist — Cashiering 949.644.3241 949.644.3339 bbelloL newportbeachca. gov Dan Matusiewicz, Finance Director 949.644.3126 949.644.3339 danmgnewportbeachca. gov 41 n N r q� C { "{ FirstAmerican Title Insurance Company NATIONAL COMMERCIAL SERVICES 18500 Von Karman Ave, Suite 600 Irvine, CA 92612 RE: Escrow No.: NCS-820331-SAl Date: 01/05/2017 Officer: Nathan Thompson Property: 707 East Balboa Boulevard Newport Beach, CA 92661 LOAN / OWNER'S ASSOCIATION INFORMATION REQUEST In order for us to obtain statements of account from your existing lender(s) or Owner's association, please provide us with the following information on your accounts. We must have accurate and complete information on your accounts, as some take up to 30 days to return our request. Please fill out and return this form as soon as possible. Federal Regulation 545-132D requires authorization in writing from you before a lender can release any payoff information to an escrow holder. A delay in returning this signed and completed form could delay the close of this escrow. FIRST TRUST DEED Lender Name `A GA Address Loan Number Phone Number Fax Number SS#/TIN SECOND TRUST DEED Lender name N t A Address ° Loan Number Phone Number OWNER'S ASSOCIATION (if applicable) Association Name {, A Management Co. Address Account Number Phone Number Fax Number Fax Number SS#/TIN SS#/TIN Our signatures below are to be considered instructions for obtaining statements; to comply with the instructions of the above named companies; and our authorization to pay from funds due us at the close of escrow said companies' fees, including, but not limited to: Statement Fees, Transfer Fees, Late Fees, Prepayment Penalties, Impound Account Shortages without our further approval. Please Provide Your Forwarding Address below, so funds or documents may be sent to you after close of escrow. R 1)o RU-Kv ',yT C� Z)a, A- vw, 6:ckA C"N at''Lu Iy Effective Date: First American Title Insurance Company National Commercial File No.: NCS-820331-SA1 (nt) Services 18500 Von Karman Ave, Suite 600 Date: 11/02/2016 Irvine, CA 92612 SELLER(S): The City of Newport Beach, a charter city and municipal corporation Attn: City Manager 100 Civic Center Drive P.O. Box 1768 Newport Beach, CA 92658 The City of Newport Beach, a charter city and municipal corporation By: Name. L ( t$ Title: (-,e— �,.A iL, &L4V A/1 SI F dt C n r 1099-S INPUT Comoanv No. Office No. T Order/Escrow/File Number Actual Closina Date NATLAC 1 1X Add F-1 Change ❑ Delete NCS-820331-SAl (nt) [1] [2] [3] [4] [5] SUBJECT PROPER TYINFORMATION Street Address or Brief Form of Legal Description (for vacant land, use APN) [6] 707 East Balboa Boulevard City (for vacant land use county) State Zip Newport Beach Orange CA 92661 Transaction Data Contract Sales Price. No. of 1099-S 2 or More 1099-S Buyers Part of Real Contingent Exchange. Was (Line 401 of HUD -1 Form) forms required Forms. Estate Tax. Show any Transaction. Is this a (or will there be) Note: If this is an for the sale of If 2 or more 1099-S real estate tax, on a contingent transaction other property or exchange, provide total this property. forms are required for residence, charged to wherein gross proceeds services received? dollar value of cash, notes this transaction, record the buyer at settlement. cannot be determined and debt relief received by the dollar amount for with certainty at time of this exchanger. this seller based on the closing? seller's declaration. [7] $1,000,000.00 [8] $ $ Yes Yes SELLER INFORMATION — PLEASE PRINT CLEARL Y Seller's Name [9] The City of Newport Beach, a charter city and municipal corporation Seller's Forwarding Street Address loo C.I f 4c- cw-k v- city State Zip (or country if not USA) SELLERS SOCIAL SECURITY NUMBER I SELLERS TAX IDENTIFICATION NUMBER [10] OR -(I 1' You are required by law to provide your closing agent with your correct Under penalties of perjury, I certify that the number shown above is my Taxpayer Identification Number. If you do not provide your closing correct Taxpayer Identification Number. agent with your correct Taxpayer Identification Number, you may be subject to civil or criminal penalties imposed by law under the Tax i Reform Act of 1986 under Internal Revenue Code Section 6045(E), 6676, Sel n Date 6722, 6723, and 7203. yatureg,� `ISijg� iY� R.l it CQ"� vl �'�l.fv6 4�ias';a 4.4� J J INSTRUCTIONS A) Make sure all data fields and areas indicated by numbers are accurately completed. B) If there is more than one seller in this transaction, each seller must have a separate 1099-S form. In most cases a husband and wife are considered one seller and only one name and corresponding Social Security Number or Tax Identification Number can appear on this form. C) Also, if more than one seller, indicate the total number of 1099-S forms required for the transaction and report the correct dollar value for this seller in area number [8]. D) Make sure all seller's information (name, forwarding address, Social Security or Taxpayer Identification Number, and seller's signature) is obtained. Missing or incorrect information may be subject to IRS penalty. E) Double check all information for completeness and accuracy before submitting for processing. P.--h—H by Fi—c A—i— Tiilo Tnc —'. 1/,)nn Page 1