Any CA preparers on now?

[kcjenkins]

I have a client who started renting his CA house after he moved out of state. Now he has finally sold it, and there is CA sales tax on the settlement sheet of $7666. How is that reported on the CA return? Is it just a closing cost, or is it similar to withholding taxes?

[BulldogTom]

Just sent you an e-mail. Let me know if you still have questions.

Have a great weekend.

Tom

Lodi, CA

[kcjenkins]

Tom, I have not gotten your email. Checked my business account, my personal account, and no sign of it. Could you PM it to me, or else resend it, and tell me which account to look for it?

I sent you the same message as a Private Message, did you get that? Look at the top of the page, and if you see a number by your Avatar in the right hand top corner, that means you have a PM and you can click on it to read it, and answer it there.

[grandmabee]

Tom, I have not gotten your email. Checked my business account, my personal account, and no sign of it. Could you PM it to me, or else resend it, and tell me which account to look for it?

I sent you the same message as a Private Message, did you get that? Look at the top of the page, and if you see a number by your Avatar in the right hand top corner, that means you have a PM and you can click on it to read it, and answer it there.

thanks for the heads up I could not figure out why I had a 1 up by my head. I keep learning new things about this forum and the atx program as well. There is many little tricks to do that I didn't know without this forum.

[BulldogTom]

I replied to your PM. Guess you didn't get it.

What you have is withholding on a real estate transaction. Your client should be getting a form 593 from their Escrow Company. When you fill out the CA 540 NR, go to Line 83 (I think) and bunny hop to the worksheet. At the top of the worksheet there is a blue box with a drop down menu for the 593 form. Fill it out and it will flow back to the 540NR.

If your client does not have the 593, have him call the Escrow company. They are notorious for screwing these forms up, so check both the 593 and the settlement statement.

Let me know if you have any other questions.

Tom

Lodi, CA

[jainen]

>>CA sales tax on the settlement sheet<<

I would guess that is income tax withholding, not sales tax. For out-of-state owners, California requires withholding of about 3% of gross sales price. You get it back when you file the non-resident return. It has no affect on reporting sales price or basis, but does count for taxes paid on Schedule A.

[kcjenkins]

Thanks, Tom and Jainen. No 593 received, at least the client does not think so. Do I have to have that form from them, or can I just go forward 'as if' I had it?

[jainen]

>>can I just go forward 'as if' I had it?<<

California posts withholding online! With taxpayer permission, go to FTB.

Another reason I don't think it was sales tax is that it was withheld from the seller, not the buyer.

[BulldogTom]

And the escrow company might have put it on a Form 592B instead of a 593. This is just another way the Republik of Kalifornia borrows money from taxpayers without paying interest.

Tom

Lodi, cA

[kcjenkins]

On the settlement sheet it says " 3 1/1% Sales price to FTB "

[jainen]

>>3 1/1% Sales price to FTB <<

Income tax, and as expected (3-1/3, I suppose). That is, Californians expect it. You may be surprised to see that the withholding is applied against the entire gross amount of the sales price, in total disregard of actual taxable gain or even loss. FTB is the agency that collects income tax. Sales tax goes to the Board of Equalization (which in my opinion is the very finest name in the whole country for a taxing authority).

[kcjenkins]

Yes, thanks to you guys I got the right form emailed to me, and now have it done and gone. I sure do appreciate the help.