All certificate requests must be submitted online through myVTax. To begin, select the Property Owners tab on the myVTax home screen.
What is required?
The information below is for common real estate transactions. If you have a scenario which does not fall under one of these categories, you may still request a certificate, but the Department may require additional documentation.
Transferor (Seller) must meet the following requirements before requesting a Commissioner’s Certificate:
2. Proof of Basis of Property being sold
Proof of Basis Required Documentation Basis Documentation can vary by the reason code you choose in myVTax. Here are some common examples:
- If the property was purchased, submit a copy of Form PT-172, Property Transfer Tax Return, from the transfer. If for some reason the return is unavailable, you may submit a copy of the HUD 1 or other settlement statement.
- If the property was acquired through an estate, submit a copy of the estate inventory.
- If the property was acquired at the death of the donor of a Life Estate, Lady Bird Deed, Revocable Trust, or through a non-probated estate, submit 1) an appraisal or Lister Card and 2) information verifying date of death of the donor (usually a death certificate).
- If the property was acquired because of a foreclosure, submit 1) a copy of the Judgment Order and 2) a copy of the Decree of Foreclosure. If applicable, include the order for public sale and other real estate owned sheet (OREO).
- If the property was received as a gift prior to the donor’s passing, submit 1) a copy of Form PT-172, Property Transfer Tax Return (PTTR), from when the donor acquired the property and 2) a copy of the PTTR from when the donor gifted the property to the seller.
- Improvements: Capital improvements that add value to the property do not include any repairs, maintenance, or personal property. If you claim improvements, submit a detailed breakdown of the improvements with the associated costs identified by project. For example, if you add a new bathroom, then submit a list of items for the project and associated costs. See Capital Improvement Breakdown Examples.
- Passive Activity Loss Carryforward: To include loss in the basis calculation, submit a copy of Federal Form 8582 showing the loss being attributed to the property.
- Other: Purchase Expenses/Fees/Tax paid at acquisition—Property Transfer Tax, attorney’s fees, and title insurance. If you claim these costs, document them by submitting the Property Transfer Tax Return and/or Settlement Statement from the acquisition of the property.
- Depreciation: If depreciation has been or could have been applied to this property, submit a copy of the depreciation worksheet or an estimated value of depreciation using the value of the property minus the value of the land divided by 27.5 years times the number of years the property was rented or used in the production of income.
If the property was not depreciated or eligible to be depreciated, the seller must submit a signed statement using the language that “the property was not used for rental purposes or the production of income and has not been federally depreciated.”
Depreciation only applies to Real Estate Withholding and Not Land Gains Withholding Certificates.
- Deferred Gain: If you previously deferred a capital gain through a 1031 Exchange, provide the deferred amount on the additional questions page on the certificate application in myVTax. Enter the amount in the box under the question: Has there been any prior deferred gain?
- Prior Casualty Loss: If you have claimed a casualty loss deduction, enter the amount of that deduction in the box under the question Has a casualty loss been claimed for the property on the additional questions page of the application program and provide a copy of the relevant tax form.
Land Gains certificate requests generally use the same information and documentation as Real Estate Withholding certificate requests with the elimination of depreciation and the additional calculation of the percentage of land to improvements calculation.
Additional Documentation required will depend on the reason for the request for a Commissioners Certificate.
Review the checklist for each reason:
- Loss experienced on the sale.
- Withholding on gain would be lower than 2.5% of sales price.
- Amount of Gain Realized On Sale Is Lower Than Federal Exclusion Amount - No longer available in myVTax.
- Federal §121 exclusion will be claimed.
- Transaction is part of a §1031 exchange agreement.
- Some or all transferors (sellers) are Vermont residents or domestic entities.
- Selling entity is tax exempt.
- Other reason where gain is not recognized federally.