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I am selling a second home in Colorado, although my primary…

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I am selling a...

I am selling a second home in Colorado, although my primary residence is Ohio. If I'm correct, and I'm not sure I am, I should have the title company withhold Colorado Capital Gains tax at closing. I can't sign any of the options on a Form 1083. I'd like to tell the title company what the estimated gain is for this transaction (new selling price minus the original price plus improvement costs required to make the property livable). They can then withhold 2% of that figure and I can validate that all when I file federal and state taxes next spring. Is that logical? Better yet, will that satisfy the state of Colorado?

Submitted: 5 months ago.Category: Tax
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Answered in 6 minutes by:
3/7/2018
Tax Professional: Barbara, Enrolled Agent replied 5 months ago
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,652
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

You are correct.

Non-residents of Colorado are subject to a withholding tax in anticipation of the Colorado income tax that will be due on the gain from the sale.

Estimate your gain to satisfy Colorado so the title company can withhold 2%.

When you file your non-resident Colorado tax return, you will then report the sale and either receive part of the 2% back as a refund or owe depending on your actual gain.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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Customer reply replied 5 months ago
Thanks! It is as I expected, but I appreciate your confirmation. I appreciate your promptness and clarity.
Tax Professional: Barbara, Enrolled Agent replied 5 months ago

My pleasure.

My goal is to provide you with excellent service. Please take a moment to rate my answer with a 5-star rating to let me know that I have achieved my goal.

Barb

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