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My parents moved to state 9/01/2013, they sold their home in…

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My parents moved to...

My parents moved to Washington state 9/01/2013, they sold their home in California in 2014 (it was never rented) they did buy a home in Washington, do they owe taxes to California, both are on social security and a penision.

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

No, both are in their 80's and we assist in taking care of them (my husband and I)

Submitted: 2 years ago.Category: Tax
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2/15/2016
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,203
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

Hi, I can help here!

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It's possible that they do not owe any taxes at all

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IRC §121 allows for an exclusion of capital gain on the sale of a primary residence ($250,000 for single filers and $500,000 for those married filing jointly)

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If the gain on sale was less than $500,000 there is not capital gains reported, hence no capital gains tax.

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They likely signed something at the closing that declared that the property was their primary residence, hence there would have been no 1099-S

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago

Capital gain is Net sales price MINUS Basis in the property

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Basis is their purchase price PLUS any improvements they have made to the property

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago

California also recognizes this exclusion for state tax purposes as well

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago

I hope this has helped.

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Please let me know if you have any questions at all.

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If this HAS helped, I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

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That's the only way I'll be credited for the work here.

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Thank you!

Lane

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