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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16579
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have inherited a piece of property from my father, I am in

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I have inherited a piece of property from my father, I am in the process of selling it. I need to know what to tell the escrow officer as to how I wish to figure my taxes on the sale. I understand that I can either pay 3.33% on the whole sale price, or 12.3% on the gain. I believe I can pay on the gain, it would be much less than on the whole price, but I want to confirm that choice is correct. I need some advice.

Megan C :

Thank you for your question. My name is XXXXX XXXXX I will be happy to help you today

Megan C :

You are only taxed on the $10,000 - but you can reduce that gain by any escrow fees that you may have paid as a result of the sale. So, if your gain is $10,000 and you paid realtor fees of $3,000 you would only have to pay tax on the remaining $7,000

Megan C :

The taxes that you are talking about are simply withholding taxes, as to how much will be withheld from the sale to satisfy your capital gains tax.

Megan C :

At the end of the year, you calculate your capital gains. If you withheld too much, you would receive a refund. If you wittheld too little you would owe

Megan C :

However, based on the amount of your transaction your capital gains is going to be very small.

Megan C :

I would opt for the 12.3% on the gain

Customer:

Thank you very much! I was sure I would only have to pay on the gains for the Federal taxes, but CA is a different animal altogether and I wanted to be more sure of my choice here!

Megan C :

I'm glad I could help. Do you have any more questions about this?

Customer:

I don't believe so at this time. Thanks again!

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