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                                      Form OR-18-WC Instructions
                                Report of Tax Payment or Written Affirmation for                  2023 
                                      Oregon Real Property Conveyance

Introduction                                                       Exemptions

Real estate tax payments at a glance                               Exempt transferors
Those who sell Oregon real property are subject to Oregon          Authorized agents aren’t required to submit tax payments 
tax on the gain from the sale. When the seller is a non-           if the transferor is an exempt transferor. The following are 
resident, escrow agents and attorneys acting as authorized         examples of exempt transferors:
agents may be required to withhold and remit tax payments 
                                                                   • An individual who is a resident of Oregon (see “Determin-
to the Oregon Department of Revenue as an estimated pay-
                                                                   ing residency status”);
ment for any taxes that may be due. Taxpayers will claim 
                                                                   • A C corporation registered to do business in Oregon;
these tax payments as estimated tax payments on their 
                                                                   • A personal representative, executor, conservator, bank-
Oregon tax returns filed for the year in which the sale was 
                                                                   ruptcy trustee, or other person acting under judicial 
made. These instructions and forms are designed to inform 
                                                                   review;
authorized agents and taxpayers of their requirements. 
                                                                   • A pass-through entity reporting income on Form OR-20-S, 
There are exceptions as indicated in these instructions.
                                                                   OR-65, or OR-706, (see exceptions under “Determining 
Purpose                                                            nonexempt status”); or
                                                                   • A governmental instrumentality (such as city, county, 
Form OR-18-WC is required for all nonexempt transferors            state, or federal agencies).
who have not provided written assurance that the entire gain 
is excludable from federal tax under IRC Section 121. Trans-       Authorized agents:  Don’t use this form for exempt transfer-
ferors (and their authorized agents) may use this form to          ors. Keep information showing that the seller is an exempt 
show that this sale is exempt by completing Parts A through        transferor.
C and signing the form.                                            Transferors: The authorized agent may require proof or 
                                                                   have you sign a document certifying that you are an exempt 
Definitions                                                        transferor. Don’t submit this document to us, but keep it 
                                                                   with your records.
The following terms are used in these instructions:

Authorized agent is an escrow agent licensed under Oregon          Exempt transfers
Revised Statutes (ORS) 696.505 to 696.590. An attorney is 
an authorized agent if there is no licensed escrow agent in-       Authorized agents aren’t required to submit tax payments if:
volved and the attorney deposits the proceeds of the sale into     • The consideration (total sales price) for the real property 
a client trust account and disburses funds to the transferor.      is $100,000 or less;
FEIN is the federal employer identification number a business      • The transferor delivers a written assurance to the autho-
is assigned for federal tax purposes.                              rized agent, as provided in Treasury Regulation 1.6045-4, 
                                                                   that the sale or exchange qualifies for exclusion of the 
Nonexempt transferor is a transferor that is a nonresident of      entire gain as the seller’s principal residence under IRC 
Oregon, including grantor trusts and single-member LLCs            Section 121;
owned by an individual or C corporation, or a nonresident          • The conveyance is pursuant to a judicial foreclosure 
C corporation that isn’t registered to do business in Oregon       proceeding, a writ of execution, a nonjudicial foreclosure 
or is otherwise qualified to do business in Oregon on the          of a trust deed, or a nonjudicial forfeiture of a land sale 
closing date of the conveyance.                                    contract; or
Pass-through entity is an entity through which income and          • The conveyance is occurring instead of foreclosure of 
expenses flow to the owners of the entity, such as a part-         a mortgage, trust deed sales contract, or other security 
nership, S corporation, limited liability company (LLC),           instrument, or a land sale contract with no additional 
limited liability partnership (LLP), certain trusts, or estates.   monetary consideration.
See “Determining nonexempt status” for LLCs and grantor            Principal residence exemption. If the nonexempt transferor 
trusts that are disregarded entities.                              is selling a personal residence located in Oregon and the 
Transferee is a person who acquires ownership of real prop-        entire gain qualifies for exclusion under federal law, the 
erty located in Oregon.                                            transferor must provide the authorized agent with: 
Transferor is a property owner who transfers, sells, deeds, or     • A written assurance that all of the gain qualifies for exclu-
otherwise conveys their ownership interest in real property        sion under IRC Section 121; or 
to another person or entity.
150-101-284-1 (Rev. 08-12-22)                                    1                             2023 Form OR-18-WC Instructions

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• A signed Form OR-18-WC with Parts A through C com- of Oregon for part of the year. A part-year resident may only
pleted. claim exemption from this requirement if the conveyance
The authorized agent will send us a copy of the written as- occurs and the proceeds are disbursed during the part of the
surance or Form OR-18-WC. year that the transferor is a resident of Oregon or another
exemption applies.
If the nonexempt transferor is selling a personal residence and
Example 1:
the entire gain isn’t excludable from federal tax, the transferor Anne moved from Oregon to California on
and authorized agent must complete Form OR-18-WC. Situa- March 31, 2023. She sold her Oregon property on July 28,
tions where the entire gain isn’t excludable include situations 2023. Even though Anne was a resident of Oregon for the
when the transferor claimed business use of home deduc- first three months of the year, she wasn’t a resident at the
tions in the past, or the gain exceeds the federal exclusion time of the conveyance so she may not claim exemption as a
amount. resident of Oregon and must complete Form OR-18-WC. If it
was Anne’s principal residence for 5 years before she moved
Authorized agents: If the transferor is selling their personal and her gain is $250,000 or less, she qualifies under federal
residence and has provided you with a written assurance law to exclude the gain from tax. She will claim the appro-
that the entire gain qualifies for exclusion under IRC Section priate exemption in Part C when she completes the form.
121, don’t use this form.

Determining nonexempt status
Determining residency status
Tax payments are required when nonresidents sell Oregon Disregarded entities
real property, unless the transfer is exempt. If it’s uncertain If a transferor is an LLC or a grantor trust, special rules apply
whether transferors are Oregon residents, use the criteria for tax purposes. Generally, these entities are disregarded for
below to help make that determination or have them provide tax purposes. To determine if the entity is disregarded for
a signed statement indicating their residency status. tax purposes, use these guidelines.
LLCs. Authorized agents should disregard an LLC owned
Oregon resident
entirely by an individual, spouses, or a C corporation. They
A transferor is a full-year resident of Oregon (even if living should base payment requirements on the owner instead of
outside of Oregon) if all of the following are true: the LLC. If an LLC is owned by one individual or spouses
• The transferor thinks of Oregon as his or her permanent filing a joint return, treat the member(s) as individuals and
home; follow the related instructions. If the LLC is solely owned
• Oregon is the center of the transferor’s financial, social, by a C corporation, treat it as a C corporation and follow
and family life; and the related instructions. If the seller is a single member LLC
• Oregon is the place the transferor intends to return to owned by an exempt transferor, such as an LLC with mul-
when away. tiple owners or an S corporation, then the authorized agent
won’t send in payments because the pass-through entity is
The transferor is still an Oregon resident if he or she moves required to do so using Form OR-19-V.
out of Oregon temporarily or moved back to Oregon after a
temporary absence. Grantor trusts. A grantor trust isn’t recognized for tax
purposes because the grantor retains substantial control. A
Oregon nonresident grantor trust is sometimes referred to as a “revocable trust”
or a “living trust.” As long as the grantor is living, treat the
A transferor is a nonresident of Oregon if they maintain trust as an individual and follow the related instructions.
their permanent home outside of Oregon all year. Oregon Fill out the form and submit any payments in the name of
residents may be deemed nonresidents if they: the individual.
• Maintained a permanent home outside of Oregon the If the grantor is deceased, the trust is irrevocable. This form
entire year; and and tax payments aren’t required for an irrevocable trust.
• Didn’t keep a home in Oregon during any part of the
year; and
• Spent less than 31 days in Oregon during the year. Form OR-18-WC

Form OR-18-WC is retained in the records of the authorized
Oregon part-year resident agent for six years from the date the transaction closed. The
A transferor who moved into or out of Oregon during the authorized agent also sends the original Form OR-18-WC
calendar year is a part-year Oregon resident. The individual and any required attachments to the department. The trans-
is a resident of Oregon for part of the year and a nonresident feror should keep a copy of the completed Form OR-18-WC.
150-101-284-1 (Rev. 08-12-22) 2 2023 Form OR-18-WC Instructions

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When the property is owned by more than one complete Part B, provide a copy of the form to the transferor,
transferor keep a copy for their records, and send the form to us.
Note:
Each transferor is considered separately. If one transferor is If you can exclude all of the gain under Internal Rev-
enue Code (IRC) section 121 for selling your home, use Part
exempt, tax payments are only required on the portion of
C. Don’t use Part C if you’re able to exclude gain from taxa-
the conveyance attributable to the nonexempt transferor(s).
tion under a different federal law, or if you can only exclude
If two transferors are married and intend to file a joint part of your gain under IRC section 121. In those situations,
Oregon tax return for the year of the transaction, complete complete Part D and show the applicable IRC and excluded
one Form OR-18-WC. Otherwise, complete a Form OR-18- gain on line 11.
WC for each transferor. Example 2: A California resident (nonexempt transferor) sells
Oregon property and reasonably expects to be eligible to
Instructions claim the credit for taxes paid to another state on the Oregon
The transferor and authorized agent need to complete Parts nonresident return based on the amount of gain that Cali-
A and B. The transferor then completes Part C or Part D and fornia will also tax. The California resident completes Part
signs the form. The authorized agent then completes Parts A, checks the appropriate box in Part C, and signs the form.
E and F, as needed. Example 3: A California residents sells an Oregon property
Use the following guidelines to determine which box to at a loss, and there is no gain on the sale. The California
check in the “Type of property conveyed” in Part A: resident does not need to complete Form OR-18-WC.

Specially assessed is property that has received a special
property tax assessment such as a reduced valuation or Part D: Calculation of gain
deferral.
The transferor completes Part D to show the calculation of
Undeveloped land is a parcel of land that is vacant and taxable gain and signs the form.
hasn’t been improved for accessibility to utilities nor has any
Provide this to the authorized agent handling the transaction
structures located upon it.
in the time specified by the authorized agent (but no later
Acquired as gift is property that the seller didn’t purchase. than the closing date). The authorized agent will use the tax-
It could be property that was inherited or simply gifted to able gain amount to determine the tax payment.
the seller. Unless you claim an exemption or are otherwise exempt
Farm use is land that is employed in the trade or business from this requirement, the authorized agent must withhold
of farming for a profit. The land may be zoned for exclusive a tax payment from the proceeds. They will submit a tax
farm use (EFU) but isn’t required to be. payment that is the smallest of:
Rental property is any real property (commercial, industrial, • Four percent of the consideration (sales price);
or residential) that is a rental building or structure (including • The net proceeds disbursed to the transferor; or
mobile homes) for which rental income is received. • Eight percent of the gain that is includable in Oregon
taxable income.
Personal residence with taxable gain is property that was
used as a personal residence and part of the gain was not If you don’t know your adjusted basis in the property or you
excludable under IRC Section 121. See “Exemptions” for don’t complete Part D of this form in time, the authorized
more information. agent will withhold the smaller of 4 percent of your consid-
eration or all of your net proceeds as a tax payment.
Other is for property that needs additional explanation or
doesn’t fit elsewhere, such as commercial property or a per- Calculating the taxable gain
sonal residence without taxable gain.
Lines 1 through 6—Adjusted basis
Complete lines 1 through 6 to calculate the adjusted basis.
Part C: Exemption
Attach a separate sheet with your calculations if you have
If a transferor reasonably determines that the gain from the other increases or decreases to basis that are not included on
sale is unlikely to be subject to Oregon tax, the transferor the form. Adjusted basis is generally considered the amount
may claim an exemption by checking the appropriate box originally paid for the property plus improvement costs and
in Part C. In making the determination, the transferor may minus depreciation. Use your federal adjusted basis unless
not consider other losses or deductions that may be claimed your Oregon adjusted basis is different from your federal
when the tax return is filed. To claim an exemption, the adjusted basis.
transferor completes Part A, selects the reason for the exemp- You may wish to consult a tax professional for assistance if
tion in Part C, and signs the form. The authorized agent will you’re unsure how to calculate your adjusted basis.

150-101-284-1 (Rev. 08-12-22) 3 2023 Form OR-18-WC Instructions

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Line 7—Selling costs
Part E: Calculation of tax payment
Unless these are already included on line 6, enter the selling
costs directly related to the conveyance. If a transferor isn’t exempt from the tax payment require-
Line 9—Consideration ments or doesn’t complete Part C indicating an exemption,
the authorized agent must withhold from the proceeds and
Your consideration for the conveyance is the amount given submit the smallest of:
to you in exchange for your interest in the real property and
is generally the sales price. Consideration includes cash, • Four percent of the consideration (sales price);
the fair market value of any property you received in the • Eight percent of the gain that is includable in Oregon
transaction, and any debt assumed by the buyer. taxable income; or
• The net proceeds disbursed to the transferor.
Line 11—Excludable gain
To determine the proper tax payment, the transferor must
Enter the amount and applicable IRC(s) of the gain from line
complete Part D, “Calculation of gain,” and provide it to
10 that is excludable (in whole or in part) under federal law.
the authorized agent handling the transaction in the time
If you use the installment method under IRC Section 453 to specified by the authorized agent (but no later than the
report the gain associated with the conveyance, this reduces closing date). If the transferor doesn’t provide this to the
the gain used to calculate the tax payment. Reduce the gain authorized agent by the closing date, the authorized agent
for the year by the amount that is deferred. The authorized must complete Parts A, B, and E of Form OR-18-WC and
agent is only required to submit a tax payment on the first remit 4 percent of the consideration for the conveyance, or,
installment of an installment sale.
if less, the entire net proceeds.
Example 3: Matt sold his rental triplex and he needs to de-
termine his adjusted basis. He purchased the property 15 Calculating the tax payment
years ago for $400,000 (line 1). He renovated the property
and spent an additional $200,000 (line 2). He will enter a The authorized agent must complete Part E if a nonexempt
total of $600,000 on line 4. Matt has claimed straight-line transferor is not claiming an exemption in Part C. Also com-
depreciation on the property over the last 15 years total- plete Part A if the transferor has not done so.
ing $327,270 ($21,818 each year for 15 years). He will enter
$327,270 on line 5 and enter his adjusted basis of $272,730 Line 13—Consideration percentage
($600,000 – $327,270) on line 6. He had ordinary selling costs The consideration for the conveyance is the amount given to
of $50,000 (line 7), so his adjusted basis plus selling costs on the transferor in exchange for the transferor’s interest in the
line 8 are $322,730. Matt sold the property for $750,000 (line real property and is generally the sales price. Consideration
9), and none of his gain is excludable. Matt’s gain includable includes cash, assumed debt, and the fair market value of
in taxable income (line 12) is $427,270 ($750,000 – $322,730). any property given to the transferor.
Example 4: Sarah’s filing status is single. She sold her per- Multiply the amount the transferor provided on line 9 by
sonal residence and needs to determine her adjusted basis
4 percent (0.04). If the transferor has not completed Part D
She purchased the property eight years ago for $225,000 (line
(and is not exempt), determine the consideration and enter
1). She has not made any capital improvements nor had any
4 percent of that amount here.
allowable depreciation, so her adjusted basis is $225,000 (line
6). Sarah’s selling costs are $20,000 (line 7), and her adjusted
Line 14—Net proceeds to seller
basis plus selling costs equal $245,000 (line 8). She sold the
property for $690,000 (line 9). Her gain on line 10 is $445,000 Net proceeds is the amount from the conveyance that is to
($690,000 – $245,000). Under IRC Section 121, Sarah may be disbursed to the transferor. Generally, this is the amount
exclude $250,000 of the gain from the sale of her personal of “cash to seller” shown on the HUD-1 settlement sheet.
residence from taxation, so she enters ‘121’ and $250,000 on
Example 6: Katie sold a small commercial building for
line 11, so her taxable gain on line 12 is $195,000 ($445,000
$500,000. She still owed $205,000 on it. Her selling expenses
– $250,000).
from the property were $20,000 and included typical costs.
Example 5: Edward sold a large acreage and his gain on line The amount on the HUD-1 settlement sheet on the “cash-
10 is $600,000. He and the transferee entered into a land-sale to-seller” line was $275,000. The escrow agent is scheduled
contract where the transferee pays Edward over five years to disburse $275,000 from this conveyance. The authorized
with 40 percent paid in the first year and the remainder paid agent will enter “net proceeds”of $275,000 on line 14.
evenly each subsequent year. For tax purposes, IRC Section
453 allows Edward to recognize only $240,000 ($600,000 x Example 7: Same facts as Example 6, except that Katie en-
40%) of the gain in the year of the conveyance, so he enters tered into a like-kind exchange to defer part of the gain. The
‘453’ and $360,000 ($600,000 – $240,000) on line 11 so he can escrow agent forwarded $200,000 of the amount due to Katie
subtract the deferred gain. The authorized agent will calcu- to a qualified intermediary. The escrow agent is scheduled
late the tax payment only on $240,000 of the gain recognized to disburse $75,000 to Katie, so this is the amount that will
in the year of the sale (line 12). be entered as the net proceeds on line 14.
150-101-284-1 (Rev. 08-12-22) 4 2023 Form OR-18-WC Instructions

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Line 15—Taxable gain percentage If you need to make a payment and have already submitted
Form OR-18-WC, see Form OR-18-WC-V Instructions for
Multiply the amount the transferor provided on line 12 by
additional information.
8 percent (0.08). If the transferor has not completed Part D
(and is not exempt), enter the amount from line 13. Example 8: Hanna conveyed her real property on August
14, 2023. Hanna and the authorized agent complete Form
Line 16—Tax payment OR-18-WC. Then the authorized agent submits Form OR-18 -
Compare lines 13, 14, and 15, then enter the smallest amount WC with payment by September 3, 2023, or within 20 days
here. This is the amount to retain and submit to us on behalf of disbursal of the proceeds from the sale. We will credit
of the transferor. Hanna’s tax account with the payment for 2023 as of the date
the payment is received.

Information for authorized agents: Forms
Part F and reporting tax payments
You can access our forms and instructions anytime on our
An authorized agent must obtain a completed Form OR-18- website at www.oregon.gov/dor/forms.
WC from a nonexempt transferor by the closing date. Other- On our website you can:
wise, the authorized agent must complete Parts A, B, E, and
F of Form OR-18-WC, and submit a payment of 4 percent of • Download current forms, instructions, and publications.
the sales price or, if less, all of the net proceeds. • Download prior year forms and instructions.
If a nonexempt transferor completes a written assurance that
all of the gain qualifies for the principal residence exclusion Important addresses
under IRC Section 121, Form OR-18-WC is not required.
The authorized agent must send either Form OR-18-WC or Mail Form OR-18-WC with payment (if applicable) within
the written assurance for all nonexempt transferors to the 20 days from disbursal (or within 30 days from closing if
department within 30 days from closing. there is no disbursal) to:
Oregon Department of Revenue
Part F and payments PO Box 14555
If line 16 shows a tax payment due, complete Part F. Pro- Salem OR 97309-0940
vide a copy of Form OR-18-WC to the transferor. Submit
the payment to us with the signed and completed Form
Do you have questions or need help?
OR-18-WC. As evidence of the tax paid on the transferor’s
behalf, keep a copy of the Form OR-18-WC in your records www.oregon.gov/dor
for six years. 503-378-4988 or 800-356-4222
The transferor will claim this payment on their 2023 tax questions.dor @ dor.oregon.gov
return. Individuals will include it with their estimated pay- Contact us for ADA accommodations or assistance in other
ments on their Form OR-40-N or OR-40-P. C corporations languages.
will include it as a withholding payment made on their
behalf on their Form OR-20 for the tax year that includes
the date of the sale.
You must remit the tax payment along with Form OR-18-WC
to the department within 20 days from the date the pro-
ceeds from the conveyance are disbursed to the transferor.
We will credit the payment to the appropriate tax year for
the transferor as of the date of the payment based on the
information provided on Form OR-18-WC.

150-101-284-1 (Rev. 08-12-22) 5 2023 Form OR-18-WC Instructions

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