Liam Hernandez (38) paid $112,000 for a single-family home in Eugene, Oregon on July 1, 2021 and immediately placed it in service as a residential rental property. At the time, the land was valued at $10,000. The property generated $6,000 in rental income for the year. Liam's only expenses consisted of depreciation, $500 in insurance, and $750 in real estate taxes.

To finance the purchase, Liam sold his townhouse in Corvallis, Oregon, which was his principal residence since March 2018, for $98,150.

Liam is not a real estate professional, but he does actively participate in his rental real estate activity. He did not provide any personal services during the year, although he has notified his tenant that he will make minor repairs to the property as needed. Liam has no other passive income or losses.

Question:

Which of the following statements is correct with respect to the sale of the Corvallis property?

a.Liam cannot exclude any gain from the sale from his income.

b.Liam is required to file Form OR-18-WC with his 2021 Oregon tax return.

c. Liam has no Form OR-18-WC or withholding requirements.

d. Liam must withhold 4% of the sales price and report it as an estimated tax payment on his 2021 tax return.