Section 40-18-86, Code of Alabama 1975, generally requires that 3 or 4 percent of the purchase price be withheld. However, if the gain recognized on the sale is less than the purchase price, and the seller provides the buyer with an Affidavit of Seller’s Gain (see Form NR-AF2), then the buyer may withhold 3 or 4 percent of the amount of the gain. If the amount to be withheld, as based on the purchase price or the gain, is greater than the net proceeds of the transfer, then only the net proceeds need be withheld and remitted by the purchaser. Generally, the net proceeds of the sale are the net payments to the transferor as shown on the closing statement, but “net proceeds ” may be calculated as the amount of money and other consideration received by the seller after deducting mortgage or other secured debt, ad valorem taxes, sales commissions, title premiums, survey expense, costs for environmental and other reports, and all other closing costs and expenses.
Yes, once the withdrawal is made, it would be taxable on your Alabama income tax return.
The rollover is exempt from Alabama income tax.
Yes, the amount withdrawn is added back to the contributing taxpayer’s return, plus a 10 percent penalty.
No, the money is not taxable as long as the money is used to pay for higher education expenses.
The postmark date on your contribution will be accepted as the date of the contribution, as long as it is on or before December 31. The contribution does not have to be received by the plan on or before December 31.
