Does anyone know any details about 3.8% tax on home sales?

Tax Advisors
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Jul 7, 2010 by Tax Advisors
Category: Real Estate

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Kerry Freeman EA
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Advisor: Kerry Freeman EA, IRS Tax Relief
Aug 4, 2010  
the 3.8% is a california state withholding for certain real estate sales. One of the exception for not witholding this is using the federal capital gain rules. as expalined by Goldfish. But some times a mistake at the title office will create this withholding at which you claim this on the sate return and usually get a full refund (however:this can cause the ugly AMT to make itself pop up on the Federal filing, causing more taxes)

Best advise work with both the RE, title and a Tax professional (CPA or EA) before closing.


Kerry Freeman, EA

623-518-2157

www.freemanincometaxservice.com
Goldfish
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Goldfish
Jul 7, 2010  
If you sell your home for a profit above the current capital gains threshold of $250,000 per individual (or $500,000 per couple) then you would be required to pay the additional 3.8% tax on any gain realized over this threshold. Most people who sell their homes will not be impacted by these new regulations.