Recommend Our Site to Your Friends!

Print This Page

Subject:  Tax Question
Date:  Mon, 28 Feb 2005
From:  Michael

I'm selling a rental property in Colorado. Do I have to pay capital gains to Colorado and California?

Answer

Date:  04 Mar 2005

Hello Michael,

Presumably you're a California resident.

Yes. A sale of real estate is always sourced in the state it is located in. As a California resident, you are subject to California income tax on your worldwide income. A tax credit is available on the California income tax return to reduce or avoid double taxation. See California Schedule S and the related instructions. Consider consulting a professional for your tax return preparation for the year of sale.

Good luck!
Mike Gray

We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.