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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Capital Gains and Losses
Satisfied Customers: 263
Experience:  Over 20 Years experience in resolving tough tax cases
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I have a capital gain this year (2016) from the sale of real

Customer Question

I have a capital gain this year (2016) from the sale of real estate. I also have a prior year tax assessment that I just received. If I pay the tax assessment today, will that help at all with the tax I will owe this year for the capital gain?
Submitted: 9 months ago.
Category: Capital Gains and Losses
Expert:  emc011075 replied 9 months ago.

Hi. My name is ***** ***** I will be happy to help you.

Capital gains will be included in your income but the property taxes are deducted on Schedule A, itemize deduction. If you are already maximizing your standard deduction and you will not be subject to alternative minimum tax, than yes, if you pay it today, it will reduce your taxes. As long as you put it on a credit card or do an online transfer/payment, you should have payment confirmation dated today.

Expert:  emc011075 replied 9 months ago.

I am sorry, I just noticed, that the country is Mexico. Are you asking about US taxes or Mexico?

Customer: replied 9 months ago.
The US, I just happen to be on vacation in Mexico! The taxes I am thinking of are paying are income/self employment
Expert:  emc011075 replied 9 months ago.

Ok. Are you talking about making an estimated payment for 2016 or paying off balance due for prior years?

Expert:  emc011075 replied 9 months ago.

Paying off your federal tax debt is not deductible. But you can deduct the state taxes on Schedule A. But again, unless you are already maximizing your standard deduction, you will not see the full offset.

If you are making estimates, prepaying your 2016 taxes, you will get a credit for it but it will not reduce your capital gains. The tax will be same but, you just pay some of it now and the rest in April. If you are making state estimates you can deduct it on Schedule A.