The short answer
Under ORS 314.258 the escrow agent or attorney closing a sale by a nonresident individual, or a C corporation not doing business in Oregon, must withhold the least of three amounts: 4% of the consideration, the net proceeds disbursed to the seller, or 8% of the gain includable in Oregon taxable income. Form OR-18-WC has no exchange box in its Part C exemptions. Instead the seller completes Part D, enters the deferred gain on line 11 as excludable gain from a federal nonrecognition section and writes 1031 in the blank, so taxable gain on line 12 is zero, 8% of it is zero, and the payment on line 16 is the smallest of the three amounts, which is nothing. The form must be in the agent's hands by the closing date, and the agent mails the original to the Department within 30 days of closing. After a successful exchange into property outside Oregon you also file Schedule OR-24 every year until the replacement property is sold. The state's broader rules are on the Oregon 1031 exchange page.
At a glance
| Statute | ORS 314.258, withholding by authorized agents on conveyances of Oregon real property |
|---|---|
| Who is withheld | Nonresident individuals (filing OR-40-N or OR-40-P) and C corporations not registered to do business in Oregon |
| Amount | The least of 4% of consideration, the net proceeds disbursed to the seller, or 8% of gain includable in Oregon taxable income |
| Threshold | No withholding when the total sales price is $100,000 or less |
| Exchange entry | Part D, line 11: excludable gain from a nonrecognition section under federal law, with the IRC section written in |
| Deadline for the seller | Part D must reach the authorized agent no later than the closing date, or the agent remits 4% of the price or all net proceeds |
| Deadline for the agent | Mail the original OR-18-WC within 30 days of closing, or within 20 days of disbursal when sending a payment |
| After the exchange | Schedule OR-24 filed annually for Oregon property exchanged into property outside Oregon until it is disposed of |
Oregon withholds the least of three numbers, and only from nonexempt transferors
ORS 314.258 assigns the job to the authorized agent, meaning the licensed escrow agent or, if none is involved, the attorney who runs the proceeds through a client trust account. The agent withholds and remits an estimated tax payment on behalf of a nonresident individual or a C corporation that is neither domiciled nor qualified to do business in Oregon on the closing date. Oregon residents, pass-through entities, personal representatives and government bodies are exempt transferors and never use Form OR-18-WC.
The amount is the least of 4% of the consideration, the net proceeds resulting from the conveyance, or 8% of the gain includable in the transferor's Oregon taxable income. Consideration includes cash, assumed debt and the value of other property; net proceeds is the cash-to-seller line on the settlement statement. The instructions' example has a $500,000 building, a $205,000 payoff and $20,000 of costs, giving net proceeds of $275,000 on line 14.
Withholding is not required at all when the consideration is $100,000 or less, on foreclosures and deeds in lieu, or when the seller gives written assurance that the entire gain is excluded as a principal residence under section 121. The seller claims whatever is remitted as an estimated payment on Form OR-40-N or OR-40-P for the year of sale.
The exchange goes on line 11 of Part D, not in the Part C exemption boxes
Part C is a short list: full section 121 exclusion, consideration of $100,000 or less, foreclosure or writ of execution, judicial review, deed in lieu, and a resident of Arizona, California, Indiana or Virginia who expects zero Oregon tax after the credit for taxes paid at home. There is no like-kind exchange box, and the instructions say not to use Part C when gain is excluded under a federal law other than section 121; in that situation you complete Part D and show the applicable IRC section and excluded gain on line 11.
Part D walks from purchase price through improvements, depreciation and selling costs to the gain on line 10, then line 11 asks for excludable gain from a nonrecognition section under federal law, with a blank for the section number. A fully deferred exchange enters the whole line 10 gain on line 11 with 1031 in the blank, so taxable gain on line 12 is zero. The agent's Part E then shows 4% of consideration on line 13, net proceeds on line 14, 8% of zero on line 15, and the smallest, zero, on line 16.
The instructions' own exchange example confirms how net proceeds work when an intermediary is involved: escrow forwarded $200,000 of the amount due to the seller to a qualified intermediary and disbursed $75,000 to the seller, so $75,000 is the net proceeds on line 14. In a fully assigned exchange nothing is disbursed to the seller, which independently drives the payment to zero. The seller signs under penalty of false swearing, and spouses filing jointly complete one form.
Hand Part D to escrow by the closing date, or the agent withholds 4%
The timing rule is unforgiving. The authorized agent must obtain a completed OR-18-WC from a nonexempt transferor by the closing date; otherwise the agent completes Parts A, B, E and F itself and submits 4% of the sales price or, if less, all of the net proceeds. The exchange does not rescue you after the fact, because the agent has no basis for the line 11 exclusion without your signed Part D.
Send the draft to escrow when you open the exchange, together with the assignment to the intermediary, so the net proceeds line reflects the assignment and the agent can review the gain calculation before funding. What the intermediary needs from you is covered under what a QI needs to open an exchange; the Oregon form should match those documents.
The agent keeps the form six years, gives you a copy, and mails the original within 30 days of closing when no payment is due, or within 20 days of disbursal with a payment. The Department credits any payment to your account as of the date received, which matters if a payment is made in error: it comes back only through your OR-40-N refund, not to the exchange account, as explained under state withholding at closing.
Boot and partial exchanges: line 11 excludes only the deferred part
If you take cash at closing, only the deferred gain goes on line 11 and the recognized portion stays on line 12, where 8% of it competes with 4% of the price and the cash actually disbursed to you. Because the agent remits the smallest figure, the cash-to-seller line usually caps the payment in a partial exchange.
Hypothetical: a Washington resident sells a Bend duplex for $800,000 with $300,000 of gain, assigns $750,000 to the intermediary and keeps $50,000 of boot. Line 11 shows $250,000 deferred and line 12 shows $50,000 taxable. Part E compares $32,000 (4% of price), $50,000 (net proceeds) and $4,000 (8% of taxable gain), so the agent remits $4,000, which the seller claims on the OR-40-N against Oregon tax on the $50,000. Run your own numbers with your CPA, since depreciation recapture and selling costs move the gain.
The instructions also allow an installment sale deferral on line 11 under section 453, which can combine with a partial exchange where the buyer carries a note; how seller financing interacts with an exchange is a federal question first.
After closing: Schedule OR-24 every year, and what a failed exchange costs
A successful exchange of Oregon business or investment property for property outside Oregon triggers Schedule OR-24, Oregon Like-Kind Exchanges/Involuntary Conversions. You file it with your Oregon return for the year of the exchange and annually thereafter until you dispose of the replacement property, one form per exchange, attached to the OR-40, OR-40-N or OR-40-P with the Form OR-24 box checked, or to the OR-65, OR-41 or OR-20 series for entities. A taxpayer with no Oregon filing requirement submits it through Revenue Online. An Oregon-for-Oregon exchange needs no OR-24.
That annual filing is how Oregon keeps track of gain it expects to tax when the replacement property, including a DST interest holding property in another state, is eventually sold. Exchangers who stop filing the schedule lose nothing at the time but make the later Oregon return harder to reconstruct.
If the exchange fails after the OR-18-WC went in with a zero payment, the form is not amended. The gain is taxable in Oregon for the year it is recognized, estimated tax rules apply, and your options after a failed exchange are the same as anywhere else.
Related questions
Is there an exemption box on OR-18-WC for a like-kind exchange?
No. Part C covers section 121 sales, prices of $100,000 or less, foreclosures, judicial review and certain out-of-state residents. An exchange is shown in Part D by entering the deferred gain on line 11 as excludable gain under a federal nonrecognition section, with 1031 written in the blank, so that taxable gain and the 8% figure fall to zero.
My LLC owns the property. Does the LLC file OR-18-WC?
An LLC owned entirely by one individual, by spouses, or by a C corporation is disregarded and the form is completed in the owner's name. An LLC with several members, an S corporation or a partnership is an exempt transferor for this form because the entity makes its own nonresident owner payments on Form OR-19-V.
The escrow agent wants the form a week before closing. Is that required?
The regulation requires Part D no later than the closing date, but the agent sets the earlier internal deadline it needs to review the numbers, and if the form is not in hand at closing the agent must withhold 4% of the price or all net proceeds. Treat the agent's date as the real one.
Does the 2025 form work for a 2026 closing?
The Department publishes a year-dated OR-18-WC and an undated current version; the instructions revised September 3, 2025 and the form revised June 3, 2025 carry the same Part C, Part D and Part E structure. Use whichever the escrow agent is currently filing, and confirm the tax year end date in Part A matches your return year.
I moved from Oregon to Nevada before the sale. Am I a nonresident for the form?
Residency is tested on the closing date, and the instructions' example treats a seller who moved out in March and sold in July as a nonresident who must complete the form. If the sale is a full exchange the result is still a zero payment through line 11, but the OR-24 obligation follows if the replacement property is outside Oregon.
Sources
Checked against these publications on September 30, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.
- Oregon Department of Revenue, 2025 Form OR-18-WC, Report of Tax Payment or Written Affirmation for Oregon Real Property Conveyance (150-101-284)
- Oregon Department of Revenue, Form OR-18-WC Instructions (150-101-284-1, Rev. 09-03-25)
- Oregon Revised Statutes 314.258, Withholding in certain conveyances of real property
- Oregon Department of Revenue, Form OR-24 Instructions, Oregon Like-Kind Exchanges/Involuntary Conversions (150-101-734-1)
- 26 U.S.C. section 1031, Exchange of real property held for productive use or investment