Blank Hawaii N 289 Form

1. What is the purpose of the Hawaii N-289 form?

   The Hawaii N-289 form is used to certify that the withholding of tax is not required upon the sale of Hawaii real property. This applies when the transferor/seller is a resident person, when a nonrecognition provision of the Internal Revenue Code applies, or when the property has been used as a principal residence for the year preceding the transfer and the amount realized does not exceed $300,000.

2. Who is responsible for completing the N-289 form?

   The transferor or seller of the property is responsible for completing the N-289 form. This individual or entity must provide the form to the transferee or buyer. It is important to note that the transferor/seller should not file the form with the Department of Taxation.

3. What information needs to be included on the N-289 form?

   The form requires the following information:

   • Name of the transferor/seller
   • Last four digits of the identification number (SSN or FEIN)
   • Address of the transferor/seller
   • Reason for exemption (check the applicable box)
   • If applicable, a brief description of the transfer and supporting legal facts

4. What should the transferee/buyer do with the N-289 form?

   The transferee/buyer should retain the N-289 form. They must not forward it to the Department of Taxation if all transferors/sellers have provided a certification of exemption. If only some have provided this certification, the transferee/buyer must attach a copy of the N-289 to Forms N-288 and N-288A, which must be filed with the Department of Taxation.

5. What happens if the information on the N-289 form is incorrect?

   Any false statement on the N-289 form can lead to serious consequences. The transferor/seller could face penalties, including fines or imprisonment. It is essential to ensure that all information provided is true, correct, and complete.

6. Where can I get more information about the N-289 form?

   For additional information, you can contact the Taxpayer Services Branch of the Hawaii Department of Taxation. They can be reached at:

   • Address: P.O. Box 259, Honolulu, HI 96809-0259
   • Phone: 808-587-4242
   • Toll-Free: 1-800-222-3229

Filling out the Hawaii N-289 form can be a straightforward process, but many individuals make common mistakes that could lead to complications. One significant error occurs when the transferor/seller fails to provide the correct identification number. It is crucial to enter the last four digits of the Social Security Number (SSN) or the Federal Employer Identification Number (FEIN) accurately. Any discrepancy can delay the processing of the form and create issues down the line.

Another frequent mistake is not completing the address section properly. The transferor/seller must provide a complete home address for individuals or an office address for corporations, partnerships, trusts, or estates. Omitting this information can lead to confusion and might require additional steps to rectify the situation.

Many people also overlook the importance of checking the appropriate box that explains why withholding of tax is not required. There are three options available, and selecting the wrong one can result in tax liabilities that should have been avoided. Make sure to carefully review the criteria for each box before making a selection.

Providing insufficient details in sections A and B can be another pitfall. These sections require a brief description of the transfer and a summary of the law and facts supporting the claim that recognition of gain or loss is not necessary. Failing to give enough information could raise red flags with tax authorities and lead to further inquiries.

Furthermore, some individuals mistakenly believe that they need to file the N-289 form with the Department of Taxation. In reality, the transferor/seller should only give the completed form to the transferee/buyer. Misunderstanding this requirement can lead to unnecessary paperwork and potential penalties.

Another common error is not signing the form correctly. The N-289 must be signed by an individual, a responsible corporate officer, or an authorized agent. If the signature is missing or does not comply with these requirements, the form may be considered invalid.

Lastly, individuals often forget to keep a copy of the completed N-289 form for their records. Retaining a copy is essential for future reference and can be invaluable if any questions arise regarding the transaction. A simple oversight in this area can complicate matters later on.

The Hawaii N-289 form serves as a certification for exemption from the withholding of tax on the sale of real property in Hawaii. Alongside this form, there are several other important documents that may be required during a real estate transaction. Each of these documents plays a specific role in ensuring compliance with state tax laws and facilitating a smooth transfer of property ownership.

• Form N-288: This form is used to report the sale of Hawaii real property when the withholding tax is applicable. It is essential for the transferee/buyer to file this form with the Department of Taxation if any transferor/seller does not provide a certification of exemption using Form N-289.
• Form N-288A: This document is an additional form that may accompany Form N-288. It provides further details about the transaction and is required when there are multiple transferors/sellers involved in the property sale. It helps to clarify the tax obligations for each party involved.
• IRS Form 1099-S: This form is used to report the sale or exchange of real estate. It is important for the transferor/seller to receive this form from the closing agent or settlement company, as it documents the proceeds from the sale for federal tax purposes.
• Title Report: A title report is an essential document that outlines the legal ownership of the property and any liens or encumbrances that may exist. This report is crucial for both the buyer and seller to ensure that the property can be transferred without legal issues.
• Closing Statement (HUD-1 or ALTA): This document summarizes the financial aspects of the real estate transaction, including the purchase price, closing costs, and any adjustments. It provides a detailed breakdown of all financial transactions that occurred at closing, ensuring transparency for both parties.
• Power of Attorney: In some cases, a power of attorney may be necessary if one party is unable to attend the closing. This document allows an appointed individual to act on behalf of the transferor/seller, ensuring that all necessary documents can be signed and the transaction can proceed smoothly.

Understanding these accompanying documents can help streamline the process of selling or purchasing real property in Hawaii. Being well-informed about each form's purpose and requirements can lead to a more efficient transaction and help avoid potential pitfalls.

• Form W-9: This form is used by individuals and entities to provide their taxpayer identification number (TIN) to others, typically for tax reporting purposes. Like Form N-289, it ensures that the right tax information is communicated between parties involved in a transaction.
• Form 1099: This document is issued to report various types of income other than wages, salaries, and tips. It shares similarities with Form N-289 in that both forms are essential for tax compliance and reporting related to property transactions.
• Form 1040: This is the standard individual income tax return form used in the United States. While Form N-289 specifically addresses tax withholding for real property transactions, both forms play a critical role in the overall tax reporting process.
• Form 8288: This form is used by the IRS to report and pay withholding tax on dispositions of U.S. real property interests by foreign persons. Similar to Form N-289, it addresses tax obligations related to real estate transactions.
• Form 8288-A: This is a statement that accompanies Form 8288 and provides details about the withholding tax payment. Both forms are interconnected in ensuring compliance with tax regulations concerning real property sales.
• Form 8821: This form is used to authorize the IRS to disclose tax information to a third party. Like Form N-289, it facilitates communication between parties regarding tax matters, ensuring that relevant information is shared appropriately.
• Form 706: This is the United States Estate (and Generation-Skipping Transfer) Tax Return. While it deals with estate taxes, it shares a common purpose with Form N-289 in that both forms require accurate reporting of financial transactions to the IRS.
• Form 4506: This form allows individuals to request a copy of their tax return from the IRS. Similar to Form N-289, it is a tool for ensuring that the necessary documentation is available for tax-related purposes.
• Form 4868: This is an application for an automatic extension of time to file a U.S. individual income tax return. Both forms help taxpayers manage their obligations and ensure compliance with tax laws.
• Form 1041: This form is used to report income, deductions, gains, and losses of estates and trusts. It is similar to Form N-289 in that both forms deal with the tax implications of property transactions and ownership.

When filling out the Hawaii N-289 form, there are several important considerations to keep in mind. Below is a list of actions you should take, as well as those you should avoid.

• Do provide accurate information. Ensure that all details, including your name, identification number, and address, are correct to avoid any issues.
• Do check the appropriate box. Select the box that accurately reflects why the withholding of tax is not required for the property transfer.
• Do include a brief description of the transfer. This helps clarify the context of your exemption claim.
• Do sign the form. The form must be signed by the transferor/seller or an authorized representative to be valid.
• Do keep a copy for your records. Retaining a copy of the completed form can be useful for future reference or in case of any disputes.
• Do understand the implications of false statements. Be aware that providing incorrect information could lead to penalties, including fines or imprisonment.

• Don’t submit the form to the Department of Taxation. The transferor/seller should not file Form N-289 with the state; it is meant for the transferee/buyer.
• Don’t leave any sections blank. Incomplete forms may lead to delays or complications in processing your exemption.
• Don’t check multiple boxes. Only select one box that applies to your situation to avoid confusion.
• Don’t forget to provide supporting details. If applicable, include a brief summary of the law and facts that support your claim.
• Don’t ignore deadlines. Ensure that you complete the form in a timely manner to avoid any potential issues with the property transfer.
• Don’t assume the form is self-explanatory. Read all instructions carefully to fully understand what is required.

The Hawaii N-289 form is essential for real estate transactions in Hawaii, yet several misconceptions can lead to confusion. Below is a list of common misunderstandings about this form, along with clarifications to help ensure accurate completion and compliance.

1. The form must be filed with the Department of Taxation. Many believe that the transferor/seller must submit the N-289 to the Department of Taxation. In reality, the form should only be given to the transferee/buyer.
2. Only non-residents need to complete this form. This is incorrect. Residents can also use the N-289 to certify their exemption from withholding tax.
3. The N-289 guarantees exemption from all taxes. While the form may exempt the transferor/seller from withholding tax, it does not eliminate the requirement to file an income tax return to report the sale.
4. All sellers must complete the form. Only those sellers who qualify for an exemption need to fill out the N-289. If a seller does not meet the criteria, the form is unnecessary.
5. There is no need for a signature on the form. This is a misconception. The N-289 must be signed by the transferor/seller or an authorized representative.
6. Any person can complete the form. Only the transferor/seller is authorized to fill out the N-289. This ensures that the information is accurate and truthful.
7. The amount realized is the sale price only. The amount realized includes not just the sale price but also any liabilities assumed by the buyer and the fair market value of any other property transferred.
8. The form is only for residential properties. The N-289 can be used for any disposition of Hawaii real property, not just residential transactions.
9. Once the form is submitted, it cannot be changed. If there are errors, the transferor/seller can correct them, but it is important to ensure accuracy before giving the form to the buyer.
10. The N-289 is only applicable for properties sold for over $300,000. This is misleading. The form can be used for properties sold for less than $300,000 if the seller meets other exemption criteria.

Understanding these misconceptions can help individuals navigate the complexities of real estate transactions in Hawaii more effectively. It is crucial to ensure that all information provided on the N-289 is accurate and complete to avoid potential issues in the future.

Here are some key takeaways about filling out and using the Hawaii N-289 form:

• Purpose: The form certifies that the withholding of tax is not required when transferring Hawaii real property under certain conditions.
• Who Completes It: The transferor or seller is responsible for filling out the N-289 form.
• Do Not File: The transferor/seller should not submit the form to the Department of Taxation. Instead, provide it directly to the buyer.
• Retention: The buyer must keep the form but does not send it to the Department of Taxation unless required.
• Identification: Include the transferor/seller’s name, last four digits of their Social Security Number or Federal ID, and address at the top of the form.
• Reason for Exemption: Check the appropriate box indicating why withholding is not necessary, such as residency status or property use.
• Principal Residence Rule: If the property was the seller's principal residence and sold for $300,000 or less, this may qualify for exemption.
• Signature Requirement: The form must be signed by the transferor/seller or an authorized representative with power of attorney.