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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
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Experience:  10 years experience
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Sold rental home in CA. Escrow states that they need to send

Customer Question

Sold rental home in CA. Escrow states that they need to send CA 3.33%, of selling price which is $430,000. Is this something new? Also is this same as Federal Capitol Gaines Tax
which I will file next April?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.
Hi,This is just a withholding AGAINST what you will actually owe when you file your taxes in April.The 3.33% withholding is withholding for income tax, because California taxes capital gains/losses as ordinary income. Your other federal and state tax situation will determine whether you recover some, or all, of that 3.33% withheld...Very similar to the wiithholding done on a W-2 .... it will offset whatever you owe as taxes paid on your taxes next April
Expert:  Lane replied 1 year ago.
Make sense? ... questions?
Expert:  Lane replied 1 year ago.
Very likely (all other things being equal) there will be a refund, depending on that actual gain on the sale.
Expert:  Lane replied 1 year ago.
Here's an excellent intuit Q&A on this:https://ttlc.intuit.com/questions/2350021-the-state-withholds-33-3-on-real-estate-sale-when-the-withholding-is-refunded-does-it-count-as-income-in-the-next-year
Expert:  Lane replied 1 year ago.
Let me know if you need more here Lane

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