George. The only way to figure the California with holding is to read the new withholding law that went into effect as of 01-01-03. It states that investor owned property will be taxed at 3.3% withholding at the time of escrow. There is no way to get around it. The withholding will be based on the selling price and held accordingly. Example. Say you bought for $100,000 years ago but are selling now for $200,000.The withholding will be held at the selling price of $200,000 (3.3%=$6,600). That is what escrow will automatically take out and mail to the State Franchise Tax Board. The old way was to estimate on your Capitol gain and mail it in to avoid penalties but with the new law it is now done accordingly. It gives you an overage paid to the state and you can not collect that until next year when you do taxes. Face it the state is broke and they are bleeding us dry. For more info go to www.ftb.ca.gov ,then click on the blue part that says individuals. Look for whats new then click on new withholding requirements for r.e. sales. Read all that applies and it will answer all your questions. This is exactly what you are looking for. Bob
Taxpayers have been focusing on the lower 15% Federal capital gain tax rate, but do not forget that your capital gain is first allocated to the depreciation recapture tax at 25% FIRST and then if there is any capital gain left it is allocated to the 15% capital gain tax.
Posted by Diane (TX) on July 01, 2003 at 19:12:46:
California taxes capital gains at the same rate as ordinary income. The CA rate is graduated, depending on income, and ranges from 1% to 9.3%. The top rate kicks in fairly early, so if you have significant income from other sources, you’ll be paying 9.3%. (Note: The state tax you pay is an itemized deduction, so your combined federal and state effective tax rate may be less.)
Posted by Alex F. (CA) on July 01, 2003 at 12:44:54:
George,
It’s dependent upon your tax bracket and length of time you’ve held the property.
I’m selling my duplex and I live in California. My tax is 37% if I sold less than 1 year and 24% if I sold after 1 year and this is because of my tax bracket.