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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 118242
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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In Colorado I have on an option to purchase a parcel of

Customer Question

In Colorado I have on an option to purchase a parcel of unimproved property. I now want to sell this property which is owned by an owner who resides in another state. I understand Colorado has some statue about holding a portion of the proceeds of the sale for sometime to determine what taxes may be due from the sale to the seller. In my case as the optionee the seller is receiving the same price as he paid for the property.So my question is there an exception maybe where in this case where there is no profit to the seller. Also specifically what is the Colorado statue on this matter?
Submitted: 1 year ago.
Category: Legal
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Nonresident real estate transactions are subject to Colorado income tax withholding on the sales of Colorado real estate in excess of $100,000. See: C.R.S 10-11-102 (3.5). This is for the sale of real property, not for the sale of your actual option contract. If you are not selling the property itself, but if you are just selling your option contract there is no withholding.
There is also no exception to the withholding tax. On all sales of land in CO, you pay the withholding tax and at the end of the year when you file your taxes, you would receive credit for that and if any money is due back you would get it back.