Have a Tax Question? Ask a Tax Expert
Thank you for your question. My name is XXXXX XXXXX I will be happy to help you today
You are only taxed on the $10,000 - but you can reduce that gain by any escrow fees that you may have paid as a result of the sale. So, if your gain is $10,000 and you paid realtor fees of $3,000 you would only have to pay tax on the remaining $7,000
The taxes that you are talking about are simply withholding taxes, as to how much will be withheld from the sale to satisfy your capital gains tax.
At the end of the year, you calculate your capital gains. If you withheld too much, you would receive a refund. If you wittheld too little you would owe
However, based on the amount of your transaction your capital gains is going to be very small.
I would opt for the 12.3% on the gain
Thank you very much! I was sure I would only have to pay on the gains for the Federal taxes, but CA is a different animal altogether and I wanted to be more sure of my choice here!
I'm glad I could help. Do you have any more questions about this?
I don't believe so at this time. Thanks again!