MARYLAND                                      Application for Certificate of                                 DO NOT WRITE OR STAPLE 
         FORM                                                                                                               IN THIS SPACE
                                                          Full or Partial Exemption
MW506AE                           For the sale of real property or associated personal property 
                                                     in Maryland by nonresident individuals and entities.
       2023

The form and required documents   MUST BE RECEIVED         no later than 21 days before closing date. 
 Social Security Number                                                  Spouse's Social Security Number

 Your First Name                                              MI         Last Name

 Spouse's First Name                                          MI         Last Name

 Name (Corporation, Partnership, Trust, Estate, etc.)

 T/A or C/O or Fiduciary                                                                                Federal Employer Identification Number

 Present Address (No. and street)

 City or Town                                                            State                          ZIP code

 Transferor/Seller’s Entity Type:                                                                       Ownership Percentage
        Individual/ Estate/ Trust   Business                                                            ________________________%
                                                              Property Information
 Description of Property (Include street address, county, or district,      Was the property ever used as a rental or commercial property?
 subdistrict and lot numbers if no address is available.)                   (Note: Income tax returns are required in most circumstances - see instructions.)
                                                                                                          Yes     No
                                                                            Dates used as a rental/commercial property (mm/dd/yyyy):
                                                                            FROM _______________TO _________________
                                                                            Date of Closing (mm/dd/2023) 
                                                                            (REQUIRED)

                                                     Calculation of Tentative Exemption - Required
(The certificate of exemption will be calculated based on actual documents received & amounts substantiated.  The Comptroller’s decision to issue or 
deny a full or partial exemption and the amount is final and not subject to appeal.) See instructions for more details on required documentation.
 1.  Purchase price/Inherited value. (Attach a copy of the settlement statement  
    or Death Certificate and appraisal.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. ____________ 
 2.  Capital Improvements. (Optional. Will not be credited unless properly documented.  
    Attach paid invoices or receipts with cancelled checks for improvements.) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. ____________
 3.  Settlement expenses.
    a. Original purchase (Attach settlement statement)  . . . . . .
    b. Pending sale (Attach preliminary closing disclosure) . . . .                                     Add lines 3a. and 3b.  3. ____________
 4.   Add (Lines 1 through 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. ____________
 5.  Depreciation deducted for rental activity on federal return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. ____________
 6.   Subtract (Line 5 from Line 4). This is your adjusted basis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. ____________
 7.  Contract sales price. (Attach contract [1 stpage and signature pages] or preliminary  
    settlement statement.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. ____________
  8a. Subtract (Line 6 from Line 7). This is the amount subject to tax.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8a. ____________
8b.   Multiply Line 8a by ownership percentage (1.00, .50, .333, etc.)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8b. ____________
 9.  Tax Rate.  Check box for applicable tax rate.
   a.   Individual  8.0% (.080) 
   b.   Business         8.25% (.0825)
  10.  Tentative withholding amount.  Multiply line 8b by applicable tax rate.  
    If Line 8 is zero (0) or less than zero (0), enter zero (0). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. ____________

NOTE: This amount will be recalculated by the Comptroller’s Office based on the actual documentation received and amounts 
       substantiated.
  09/22

      MARYLAND                    Application for Certificate of Full or Partial Exemption                                                                   2023
      FORM                                                                                                                                                   page 2
MW506AE

Transferor/Seller’s Name ______________________________________________________  Your Social Security Number/FEIN _____________________________

                                                       Special Situations
Check the box in the “Special Situations” column that applies to your situation, if any. If none apply, your exemption will be based 
only on the amount on the worksheet on page 1. See instructions for required documentation. 

   Principal Residence.                                           Transfer is pursuant to an installment sale under §453 of 
                                                                                 the Internal Revenue Code.

   Principal Residence – Active-duty Military, Certain                           Transfer of inherited property is occurring within 6 months 
 Government Employees.                                                           of date of death.

   Tax-Free Exchange for purposes of §1031 of the Internal        Transferor/seller is the custodian of an individual retirement 
 Revenue Code.                                                                   account (IRA). 

   Transferor/seller is receiving zero proceeds from this         Transfer is pursuant to a specific Internal Revenue Code 
 transaction because proceeds are going to another seller/                       section. See addendum.
 owner (ex. cosignor).

                             Address of Settlement Agent to Mail Certificate if Issued (See instructions.)

Name of contact person and company

Street Address                                             City                                   State      ZIP code

Telephone number                  Fax number                                     Email Address

Under the penalties of perjury, I declare that I have examined this application, including any schedules or statements attached, and to the best of my knowledge and belief, it is 
true, correct and complete. If prepared by a person other than taxpayer, the declaration is based on all information of which the preparer has any knowledge.

Your signature                                  Date            Preparer’s PTIN (required by law)          Signature of preparer other than taxpayer

Spouse’s signature                              Date            Printed name of preparer

Telephone number                                                Address of preparer

                                                                Telephone number of preparer

Check here       if you authorize 
 us to contact you by email.      Email address  

 09/22

MARYLAND
FORM                                      INSTRUCTIONS FOR APPLICATION FOR                                                   2023
                                     CERTIFICATE OF FULL OR PARTIAL EXEMPTION
MW506AE                     The Comptroller’s decision to issue or deny a certificate and the amount of 
                                             tax is final and not subject to appeal.
GENERAL INSTRUCTIONS                                                    it to your submission of the MW506AE. 
Purpose of Form                                                         Calculation of Tentative Exemption/Withholding Amount
Use Form MW506AE to apply for a Certificate of Full or Partial          Complete the calculation of tentative exemption section. 
Exemption from the withholding requirements on the proceeds             Line 1.  Enter  the  purchase  price  of  the  property.  This is the 
of the sale of real property and associated personal property in             contract  amount  for  the  original  purchase.  DO  NOT 
Maryland by nonresident individuals and nonresident entities. A              include settlement costs or other adjustments in this 
nonresident entity is defined to mean an entity that: (1) is not             line. If inherited property, use the Date of Death value 
formed under the laws of Maryland and (2) is not qualified by or             of the property. You must attach an original settlement 
registered with the Department of Assessments and Taxation to                statement, property tax printout (available at www.dat.
do business in Maryland.                                                     state.md.us), original contract, date of death appraisal, 
Who May File an Application                                                  or  other  proof  of  original purchase  price  or  inherited 
An  individual,  fiduciary,  C  corporation,  S  corporation,  limited       value.
liability company, or partnership transferor/seller may file Form       Line 2.  Enter  amount  of  capital  improvements.  This line is 
MW506AE.  Unless  the  transferors/sellers  are  spouses  filing  a          OPTIONAL.  However, you     must attach paid invoices 
joint Maryland income tax return, a separate Form MW506AE is                 or  receipts  with cancelled  checks  for  improvements. 
required for each transferor/seller.                                         Documentation must include proof of payment, address 
IMPORTANT: The completed Form MW506AE and all required                       of property, and work completed. 
documentation must be received by the Comptroller of Maryland           Line 3.  Settlement  costs.  You must  attach  a  settlement 
no later than  21  days before  the  closing  date  of  the  sale or         statement  for  this amount.  You  may add  both 
transfer  to  ensure  timely  receipt  of  a  Certificate  of  Full  or      settlement costs for purchase and sale of the property 
Partial Exemption. Applications with no closing date will not be             if  you  have  a  settlement  statement  for  each.  If  a 
processed.                                                                   preliminary  settlement  statement  is not  available at 
The Comptroller’s decision to issue or deny a Certificate                    time of filing, you must forward as soon as completed 
of Full or Partial Exemption and the determination of the                    in order to be credited for these costs. You may request 
amount of tax to  be withheld if a partial  exemption  is                    this from the settlement agent.
granted are final and not subject to appeal.                            Line 4.  Add lines 1 through 3.
SPECIFIC INSTRUCTIONS                                                   Line 5.  Depreciation. Enter all depreciation already taken for 
Transferor/Seller’s Information                                              this property, if rental or commercial, on any income 
                                                                             tax return. You must attach a depreciation schedule or 
Enter  the  name,  address  and  identification  number  (Social             returns.
Security  number  or  federal  employer  identification  number) 
of  the  transferor/seller  applying  for  the  exemption.  If  the     Line 6.  Adjusted basis. Subtract line 5 from line 4. This is your 
transferor/seller was issued an individual taxpayer identification           adjusted basis.
number (ITIN) by the IRS, enter the ITIN.                               Line 7.  Contract Sales  Price. Enter  contract  sales price. You 
Check the box indicating the transferor/seller’s entity type.                must attach  current  contract (page  1 and  signature 
                                                                             pages only) or preliminary settlement statement. 
Enter  the  transferor/seller’s  ownership  percentage  of  the 
property. For example,  if there  are  four  equal  owners,  enter      Line 8a. Amount subject to tax. Subtract line 6 from line 7. 
25% for single application.                                             Line 8b. Multiply Line 8a by percentage of ownership.
Property Information                                                    Line 9.  Tax Rate. Select which tax rate applies. 
Enter  the  description of  the  property,  including the  street       Line 10. Tentative Withholding Amount. Multiply line 8b by the 
address(es) for the property as listed with the State Department             tax rate. This is the tentative amount of withholding. 
of  Assessments  and  Taxation  (SDAT), including  county. If  the           If zero or less than zero, enter zero. If zero, you may 
property does not have a street address, provide the full property           qualify for a full exemption (subject to verification). 
account ID numbers used by SDAT to identify the property.               Note: This amount will be calculated by the Comptroller’s Office 
Enter the date of closing for the sale or transfer of the property.     based on actual documentation received. 
Application will not be processed if left blank.                        Special Situations
Enter the property account ID number, if known. If the property         Principal Residence.
is made up of  more  than  one  parcel  and  has  more  than  one 
property  tax  account  number,  include  all applicable  property      Transfer is of your principal residence as defined in §121 of the 
account ID numbers.                                                     Internal Revenue Code, which means it has been your principal 
                                                                        residence  for  two  of  the  last  five  years.  Resident  income  tax 
Check  the  box  to  indicate  whether  the  property  was  used        returns for that period must have been filed to claim principal 
for  rental/commercial  purposes.  Maryland  law requires  that         residence. This will be verified by the Comptroller’s Office. 
nonresidents owning real property in Maryland file a nonresident 
income tax return reporting any rental income or loss. If you           Principal Residence – Active-duty Military, Certain 
checked  the  rental/commercial  box  and  did  not  file  returns      Government Employees. 
reporting this income or loss, your application will be denied.         Transfer  is  of  your  principal  residence  as  defined  in  §121  of 
File all appropriate returns before filing this application.            the Internal Revenue Code, if you had a move necessitated by 
Relocating Sellers                                                      government orders or are stationed in Maryland. Attach transfer 
                                                                        orders and proof of residency. This may include federal income 
If you are selling your house through a relocation company, please      tax  return  with Maryland  address,  utility  bills, property  tax 
see  the  MW506AE  –  Relo Addendum  for  further  instructions.        statements, etc. See Internal Revenue Service Publication 523.
You must complete the MW506AE – Relo Addendum and attach 

      MARYLAND
        FORM                             INSTRUCTIONS FOR APPLICATION FOR                                                      2023
                                    CERTIFICATE OF FULL OR PARTIAL EXEMPTION
MW506AE                  The Comptroller’s decision to issue or deny a certificate and the amount of 
                                                 tax is final and not subject to appeal.

Tax-Free Exchange for purposes of §1031 of the Internal                   Transfer is pursuant to a specific Internal Revenue Code 
Revenue Code.                                                             section. See addendum. 
Required  documentation  in addition to  that  on  page  1;  letter       Address to Mail Certificate if Issued
signed by the qualified intermediary, or by the person authorized 
to  sign  on  behalf  of  a  business  entity  acting  as  the  qualified Provide the name and address of the title company or settlement 
intermediary,  which  states  the  name(s)  of  the  transferor(s),       agent  to  whom  we  should  mail  the  exemption  certificate  if 
the property description, that the individual or business will be         issued. If you do not know the identity of the title company or 
acting as the qualified intermediary for the transferor(s) as part        settlement agent at the time you complete this form, you must 
of a §1031 exchange of the property, whether there will be any            email the name and address to nrshelp@marylandtaxes.gov as 
boot, and if so, the amount of boot. The amount of any boot               soon as possible. You must provide a mailing address to avoid 
must be stated on the application as the taxable amount.                  delay in recording the sale.
Note: If you paid the withholding out-of-pocket – not from sale           Signature(s)
proceeds - then you must submit proof of payment e.g. cancelled           Form MW506AE must be signed by an individual (both taxpayer 
check,  wire transfer, or other  documentation  evidencing the            and spouse, if filing a joint Maryland income tax return), or a 
withholding was paid out-of-pocket.                                       responsible corporate officer.
Transferor/seller  is receiving zero  proceeds  from this                 Include a daytime telephone number where you can be reached 
transaction.                                                              between 8:00 AM and 5:00 PM.
Note:  This situation applies when  all proceeds  go  to  another         If you would like to be contacted by email in the event that more 
seller/co-owner. This does not apply if you receive ANY proceeds.         information is needed to process your application, include your 
Required documentation in addition to that on page 1; copy of             email address and check the box allowing us to contact you by 
a letter from the transferor/seller to the title company advising         email. The exemption certificate, if issued, will not be emailed 
they are to receive zero proceeds from the sale and advising to           to you.
whom the proceeds are to go; a copy of the acknowledgment                 Your  signature(s)  signifies  that  your  application,  including  all 
letter  from  the  title company  to the  transferor/seller  that  all    attachments, is, to the best of your knowledge and belief, true, 
proceeds are to go to another seller/co-owner.                            correct and complete, under penalties of perjury.
Transfer is pursuant to an installment sale under §453 of                 If  a  power  of  attorney  is necessary,  complete  Maryland  Form 
the Internal Revenue Code.                                                548 and attach to your application.
Required  documentation  in addition to  that  on  page  1;  copy         Where to File
of  contract of  sale or copy of  settlement  sheet  from  the  title 
company; copy of promissory note to transferor which will be              Mail the completed form and all attachments to:
executed by transferee at settlement. That portion of the total             Comptroller of Maryland
payment that the transferor receives at or within sixty (60) days           Revenue Administration Division
of settlement must be stated on the application as the taxable              Attn: NRS Exemption Requests
amount.                                                                     P.O. Box 2031
                                                                            Annapolis, MD 21404-2031
Transfer  of inherited property  is occurring  within 6 
months of date of death.                                                  OR
Required documentation in addition to that on page 1; provide             Email the  completed  form  and  all attachments  to nrshelp@
a  copy  of  the  death  certificate  and  a  copy  of  the  estimated    marylandtaxes.gov
settlement sheet from the title company.                                  Note: The email submission will not expedite the processing of 
Transferor/seller is the custodian of  an individual                      your  application.  If  you  are  emailing  large  attachments,  send 
retirement account.                                                       multiple smaller emails.
Required documentation in addition to that on page 1; provide a           Submit your application via only one method.
copy of the preliminary settlement sheet from the title company,          Additional Information
the  custodian’s  Certificate  of  Good  Standing  from  its  state  of 
incorporation, and a letter from the title company stating that           For  additional information  visit www.marylandtaxes.gov,  
all proceeds will be disbursed to the custodian.                          email nrshelp@marylandtaxes.gov or call 1-800-MDTAXES  
                                                                          (1-800-638-2937) or 410-260-7980 in Central Maryland.

09/22

     MARYLAND
                                                                                                                   2023
     FORM                           ADDENDUM FOR APPLICATION FOR

MW506AE                      CERTIFICATE OF FULL OR PARTIAL EXEMPTION

Code Letter IRC Section Description                        Required Documentation
a           § 351       Transfer  is to a  corporation     Copy  of  the  agreement  of  sale;  Certificate  of  Good  Standing  of 
                        controlled  by  the  transferor  transferee  issued by  the  state  in which transferee  is incorporated; 
                        for  purposes  of  §  351  of  the notarized affidavit executed on behalf of transferee by its President 
                        Internal Revenue Code.             and  its Treasurer  stating  that  immediately  after  the  exchange  the 
                                                           transferor(s) will own stock in the transferee possessing at least eighty 
                                                           percent  (80%)  of  the  total  combined  voting  power  of  all  classes  of 
                                                           transferee’s stock entitled to vote and at least eighty percent (80%) 
                                                           of  the  total  number  of  shares  of  all other  classes  of  stock  of  the 
                                                           transferee;  and  an  appraisal  establishing the  fair  market  value,  at 
                                                           the  time  of  the  exchange,  of  any  property  other  than  stock  in  the 
                                                           transferee  which is part  of  the  consideration for  the  exchange. The 
                                                           fair market value of any such other property and/or any money which 
                                                           is part of the consideration for the exchange must be stated on the 
                                                           application as the taxable amount.
b           § 361       Transfer  is pursuant  to  a  Copy  of  agreement  governing  the  transfer  between  transferor  and 
                        tax-free reorganization    as      transferee; Certificates of Good Standing of transferor and transferee 
                        described  in §  361  of  the  issued  by  the  state(s)  in  which  transferor  and  transferee  are 
                        Internal Revenue Code.             incorporated; copy of the plan or reorganization showing that transferor 
                                                           and  transferee  are  parties  to  the  reorganization;  and  an  appraisal 
                                                           establishing the fair market value, at the time of the exchange, of any 
                                                           property other than stock or securities in the transferee which is part 
                                                           of the consideration for the exchange and will not be distributed by the 
                                                           transferor in pursuance of the plan of reorganization. The fair market 
                                                           value of any such other property and/or any money which is part of 
                                                           the consideration for the exchange must be stated on the application 
                                                           as the taxable amount.
c           § 501(a)    Transfer  is by  a  tax-exempt  Copy of determination by the Internal Revenue Service that transferor 
                        entity for purposes of § 501(a)  is a tax-exempt entity for purpose of § 501(a) of the Internal Revenue 
                        of  the  Internal  Revenue  Code   Code; Certificate of Good Standing of transferor issued by the state 
                        and transfer involves limited or   in  which  transferor  is  incorporated;  notarized  affidavit  executed  on 
                        no unrelated business taxable  behalf of transferor by its President and by its Treasurer stating that 
                        income  under  §  512  of  the  the transfer involves limited or no unrelated business income under § 
                        Internal Revenue Code.             512 of the Internal Revenue Code.
d           § 721       Transfer is to a partnership in  Copy  of  agreement  governing  transfer  between  transferor  and 
                        exchange for an interest in the  transferee; copy of the partnership agreement of the transferee.
                        partnership  such that  no gain 
                        or  loss is recognized under  § 
                        721  of  the  Internal  Revenue 
                        Code.
e           § 731       Transfer is by a partnership to  Copy  of  agreement  governing  transfer  between  transferor  and 
                        a partner of the partnership in  transferee; copy of the partnership agreement of the transferor.
                        accordance  with § 731  of  the 
                        Internal Revenue Code.
f           § 857       Transfer is treated as a transfer  Copy  of  agreement  governing  transfer  between  transferor  and 
                        by  a  real  estate  investment    transferee;  certified  copy  of  Articles  of  Incorporation  of  transferor; 
                        trust for purposes of § 857 of     Certificate of Good Standing of transferor issued by the state in which 
                        the Internal Revenue Code.         transferor is incorporated.
g           § 1033      Transfer  is pursuant  to  a  Copy  of  agreement  governing  transfer  between  transferor  and 
                        condemnation  and  conversion  government  body  or  authority  condemning  the  property;  notarized 
                        into  a  similar  property  for    affidavit  executed  by  transferor  stating  that  transferor  will  identify 
                        purposes  of  §  1033  of  the  and  purchase  replacement  property  within the  time  limits required 
                        Internal Revenue Code.             by § 1033 of the Internal Revenue Code, or copy of contract of sale 
                                                           if transferor has already identified replacement property. If proceeds 
                                                           from condemnation exceed price of replacement property, the excess 
                                                           must be stated on the application as the taxable amount.
h           § 1041      Transfer  is between  spouses  Copy of marriage license or divorce decree; copy of deed which will 
                        or incident  to divorce  for  be recorded to accomplish the transfer; if incident to divorce, copy of 
                        purposes  of  §  1041  of  the  section of court order or separation agreement governing transfer of 
                        Internal Revenue Code.             the property.
i           § 1368      Transfer  is treated  as  a  Copy  of  agreement  governing  transfer  between  transferor  and 
                        transfer  by  an  S  corporation  transferee;  copy  of  approval  by  the  Internal  Revenue  Service  of 
                        for purposes of § 1368 of the      transferor’s  S-corporation  election;  Certificate  of  Good  Standing  of 
                        Internal Revenue Code.             transferor issued by the state in which transferor is incorporated.
09/22