A Maine purchase and sale agreement for a residential property has been signed by all parties. The seller is a Maine resident who has owned the property for 15 years. All of the following statements about the transaction are accurate under Maine law EXCEPT:
Correct Answer
A) The buyer or closing agent must withhold 2.5% of the sale price and remit it to Maine Revenue Services because the seller is a Maine resident
The non-resident withholding tax requirement does NOT apply to Maine residents. The 2.5% withholding obligation is triggered only when the seller is a non-Maine resident. Since this seller is a Maine resident who has owned the property for 15 years, no withholding is required. Stating that the buyer or closing agent must withhold 2.5% in this scenario is inaccurate and therefore the EXCEPT answer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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