How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Merlo Your Own Question
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
Type Your Tax Question Here...
Merlo is online now
A new question is answered every 9 seconds

i sold a house in California in 2007 for 440k and net capital

Resolved Question:

i sold a house in California in 2007 for 440k and net capital gain of 226k. i moved to ohio that same year, but didn't file california personal income tax return. Now, 2009 i got a letter saying i owed 18k, cause the money i made from selling my house in 2007 was taxable. i thought i am exempt, cause i made less than 250k for being single and lived at that house for well over 2 years. Do i just need to file the california personal income tax and then i won't owe anything?

thanks in advance, big headache.
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.

When you sell a home, the sale proceeds are reported to you on a 1099 form, and a copy of that same form goes to the IRS and to the state where the home was sold. So the state knows you made a sale, but they do not know that this was your primary residence and that it qualifies for an exemption until you file a return and claim it.

California allows the same exclusion of $250,000 that is allowed by the IRS. But you first must file a return with California and report the sale and claim the exclusion. Once you do that, you should owe no tax on this transaction.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank youCustomer

Merlo and other Tax Specialists are ready to help you