Are home proceeds treated differently for out-of-state owners?

March 5, 2003

Subject:  California home sale by an out of state seller
From:  Richard
Date:  Wed, 29 Jan 2003

Is there special consideration of home sales proceeds for a California home which is owned and subsequently sold by out of state residents?

My friends in this predicament live in Nevada.

They are in the process of selling their "second home".



Date:  5 Feb 2003

Hello Richard,

A sale of real estate located in California is subject to California income tax and should be reported on a California income tax return. California gives no "break" for long-term capital gains. They are taxed at the same rate as ordinary income - up to 9.3%! In addition, California has enacted withholding at a rate of 3 1/3% of the sales price for the sale of most real estate that applies to both residents and non-residents.

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.

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