Maine Real Estate License Practice Exam

A non-resident selling real estate in Maine for $300,000 with a taxable gain of $30,000 is subject to withholding of what amount?

1. $7,500

2. $25,500

3. $2,145

4. $750

The correct answer is: $2,145

To determine the tax withholding amount for a non-resident selling real estate in Maine, it's important to understand Maine's withholding tax regulations for real estate transactions. In Maine, non-resident sellers are required to withhold a portion of the taxable gain from the sale of their property. In this scenario, the taxable gain is $30,000. According to Maine law, the withholding tax rate for non-residents is 2.5% of the sale amount or 7.5% of the gain, whichever is more applicable. However, for the purpose of this calculation, when looking specifically at the taxable gain of $30,000, the 7.5% would apply. Calculating the withholding amount: 7.5% of the taxable gain ($30,000) is calculated as follows: 0.075 x $30,000 = $2,250. However, if the sale price factor comes into play, sometimes 2.5% of the total sales price is also analyzed, which would be a different outcome if that rate applies to other scenarios. Nonetheless, the most critical takeaway here is the correct application of the given gain's percentage. Since $2,250 does not correspond to the listed answers and the correct calculation