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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 14876
Experience:  15years with H & R Block. Divisional leader, Instructor
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Question: my dad lives in Oklahoma. He purchased a home with

Customer Question

Question: my dad lives in Oklahoma. He purchased a home with my brother in California. The purchase price of the house was $703,000.00

My brother put down $250k leaving a balance to mortgage of $453k . This amount was financed. A year later, they sold the house for $740,000.

Is there a capital gain that should be recognized on this in the state of California?

My dad has been levied a tax liability of about $60k.

I have advised him to get a tax attorney to help him out. Any insight someone could share is much appreciated.
Submitted: 3 years ago.
Category: Tax
Expert:  Robin D. replied 3 years ago.

Robin D :

Hello and thank you for using Just Answer,
Yes, unless your father used the property as his personal residence he would need to report the sale (for federal and state).
Of course your father and brother would need to show only their own portion if cost and sales price.
Each would only have gain if their portion of cost is less than the sale.

Robin D :

So the cost was $703,000 and sold for $740,000. This would would mean that $37,000 is the gain.

Robin D :

How they split the ownership percentage would determine each of their true gain from the $37000. If it was a 50% split then They each have a $18,500 gain that would be reported.

Robin D :

Your father being a nonresident of California would need to report as a nonresident. His federal return should have already shown this sale and gain.

Robin D :

If not, he does not need an attorney, he needs to amend his federal return for the year of sale and complete a California nonresident return to show his correct amount of tax due.

Customer : So that is what I have told him as I have some experience with tax relations but I'm no longer working in that field. So where would they come up with a 60k liability.
Robin D :

They did not look at basis

Robin D :

They took the sales price and that was it.....

Robin D :

If your father had filed the state would have known what his basis was, they just used $0

Robin D :

He needs to have a tax professional complete the CA nonresident return

Robin D :

Send it to the address on the notice with a statement saying he disagrees with their assessment based on his true gain.

Robin D :

If he did not report this sale on his federal, he needs to amend.

Robin D :

I hope this CHAT has been helpful.

Customer : Ok. I understand. Thanks for you help.
Robin D :

Your positive rating is always thanks enough.

Robin D :

I really enjoyed working with you – please feel free to request me again when you come back to ask another question.

Robin D :

Did you need something more?

Robin D :

I hate to leave the CHAT if you had more questions before you rate.

Expert:  Robin D. replied 3 years ago.
Hi ,


I'm just following up with you to see how everything is going. Did my answer help?


Let me know,
Robin D