CA Tax Form 593 - To Bend Over or not to bend over, that is the question

[probablecause]

Selling my home in OC for 900k and owe 375k. Minus 50k in realtor fees, that should leave me roughly 475k for profit. I will be taking the one time fed deduction of 500k (250k per couple) so I get to keep my profits. However, I have to fill out the CA State 593 form which I interpret with either the option of .3333% of the sale price or 12.3% of the estimated gain after all of my house deductions. For me, the .333% is cheaper than 12.3 of the gain/loss. Am I missing something or is there another option. I know, talk to my tax guy. Just wanted to see if there was something I was missing. Thanks, Brendan

 

[TimeBandit]

.33 or ONE THIRD of the sale price? tell me you forgot some zeros!

 

[fmo24]

You say you owe 375 but is that what you paid. Original price is basis not loan balance

 

[probablecause]

We paid 340k for it in 2000. Added a second story, pool, and other remodels. However, all that added up is not cheaper than the 3.33% of sale price.
The 500k exemption is based off the gross profit for the feds - Not worried about that. Do have write-offs.
TimeBandit, edited for correct 3%.
Just looking at best way for State Tax.

 

[stokerwhore]

what about the 20 years worth of interest you paid on the principle? that should count towards determining your profit

 

[probablecause]

Interest was a write off and is not part of the form.. just looking the the State Tax answer.

 

[Cdog]

Your cost basis includes the remodeling and upgrades you did to the property so just make sure you work that into the equation. Sounds like you know how to do the math to figure out the rest.

 

[probablecause]

Unfortunately, with the Alternative 12.3% tax, I do not have enough remodeling. I would have to get down to a net gain of 265k to even come close. The 3% of the sale price is the cheaper of the two. I just did not know if there was something I was missing.

 

[Cdog]

At least your getting out before the exit tax.

Cavuto presses California assemblyman over wealth tax plan amid millionaire 'jailbreak' from Golden State

Fox Business Network anchor Neil Cavuto questioned California State Assemblyman Rob Bonta on "Cavuto: Coast to Coast" Friday over his proposal to institute a 0.4% wealth tax on Golden State residents worth more than $30 million.

www.foxbusiness.com

 

[lbhsbz]

https://www.ftb.ca.gov/file/personal/income-types/income-from-the-sale-of-your-home.html

According to this...if you're under the 250K/500K threshold...you don't need to report anything. I read this to apply to both CA state and Fed. Am I missing something? If so...I'm gonna lose some money based on my recent sale.

 

[84miller]

At least your getting out before the exit tax.

Cavuto presses California assemblyman over wealth tax plan amid millionaire 'jailbreak' from Golden State

Fox Business Network anchor Neil Cavuto questioned California State Assemblyman Rob Bonta on "Cavuto: Coast to Coast" Friday over his proposal to institute a 0.4% wealth tax on Golden State residents worth more than $30 million.

www.foxbusiness.com

There is a CA bill currently being proposed on a CA wealth tax. Taxed yearly on your overall value. Included in the bill, if you move out of CA, you will still have to pay the wealth tax to CA for 10 years after your exit. You cannot make this shit up...I am sure it could never be legal.

 

[Bobby V]

There is a CA bill currently being proposed on a CA wealth tax. Taxed yearly on your overall value. Included in the bill, if you move out of CA, you will still have to pay the wealth tax to CA for 10 years after your exit. You cannot make this shit up...I am sure it could never be legal.

0.15% Of CA homes will be affected per the article. I suppose they could lower the rates if it ever passes.

 

[84miller]

0.15% Of CA homes will be effected per the article. I suppose they could lower the rates if it ever passes.

You have that right. I can guarantee once in place they will lower the rates to the point it will impact the average person.

 

[lbhsbz]

Whatever it is...much like a divorce, it will be money well spent.

 

[DC-88]

Take the .0333 hold back now ($29,700), and when you do your taxes in April most or all of it will come back. Jerry Brown and now Newscum need to hold onto your money for a while to pay for their bullshit, and will give it right back to you with 0 interest after your tax filing. I've sold spec houses in January before and waited 16 months to get it back....

 

[probablecause]

Take the .0333 hold back now ($29,700), and when you do your taxes in April most or all of it will come back. Jerry Brown and now Newscum need to hold onto your money for a while to pay for their bullshit, and will give it right back to you with 0 interest after your tax filing. I've sold spec houses in January before and waited 16 months to get it back....

Thanks.

 

[Gonefishin5555]

Selling my home in OC for 900k and owe 375k. Minus 50k in realtor fees, that should leave me roughly 475k for profit. I will be taking the one time fed deduction of 500k (250k per couple) so I get to keep my profits. However, I have to fill out the CA State 593 form which I interpret with either the option of .3333% of the sale price or 12.3% of the estimated gain after all of my house deductions. For me, the .333% is cheaper than 12.3 of the gain/loss. Am I missing something or is there another option. I know, talk to my tax guy. Just wanted to see if there was something I was missing. Thanks, Brendan

Check the box on line 1 and don’t give them squat. The form is not to pay tax it’s to have tax withheld. You calculate the tax on your 2020 return. So if you screw up and have tax withheld on this transaction and your gain is less than 500k. You should get the tax refunded when you file your return. If you check box 1 you are exempt from withholding

 

[probablecause]

So is it a roll of the dice or just giving them money now only to have it given back when I do taxes? I will be less than 500k for my gain if I take sale price minus what we currently owe on the house.

 

[Gonefishin5555]

So is it a roll of the dice or just giving them money now only to have it given back when I do taxes? I will be less than 500k for my gain if I take sale price minus what we currently owe on the house.

It’s not a roll of the dice if you know the gain is less than 500k. There is no tax to be paid on the transaction so why let them hold onto your money. When you complete the 593 you have to check box 1 or your committing tax fraud?!! By checking box 1 there is no tax taken out of the sale.

 

[78Southwind]

It sounds to me like you meet the exemption since it was a principal residence for 2 out of 5 years.