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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16575
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I am a full time resident of Michigan. I bought a second

Customer Question

I am a full time resident of Michigan. I bought a second home in California five years ago. I spent virtually no time there (no two years , not even two weeks). Took no depreciation or deductions other than mortgage interest and taxes. I'm selling it now. What are my California capital gains consequences?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

Thanks for your question.

As this is not your primary residence, you will owe capital gains tax on the sale if there is a gain. Remember, you can deduct the cost of selling the house and any improvements before coming up with your final gain. In Michigan, you will get a credit for taxes paid to California so you will not be double taxed on this sale.

Please let me know if you need anything additional. If not, please rate positive.

Customer: replied 1 year ago.
This is very helpful and your service has served me well over the years. I'll definitely use you again.
So when I do my taxes in Michigan and determine my federal tax bracket, that determines the Federal Capital Gains. Is the California Capital Gains rate the same as if I lived there? Is it the same 12..3% across the board for everyone, with no breaks like there are in the Federal rate?
Expert:  Megan C replied 1 year ago.

Yes, there are no breaks for state capital taxes -- although remember you will deduct your state tax for federal tax purposes