Legal Question in Real Estate Law in California

Re: Real Estate Tax Law

With all deference to attorneys Whipple and Shers, I would strongly suggest that the best answer you can receive to this question is going to come from a CPA or a tax attorney, not a real estate attorney. Because of the ever-changing tax rules, I refer all tax questions to outside tax counsel or a qualified CPA. The best person to answer your question is going to be a CPA familiar with your financial situation, so I would posit the question to your personal CPA. If you don't have one, retain someone for an opinion before you list the property for sale. Good luck - glad someone is still able to retire!!

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Re: Real Estate Tax Law

Your information is stale. There is no longer an age 55 rule at all. Instead, the IRS now exempts the first $250,000 of gain ($500,000 for a married couple filing jointly). This exemption is subject to the two-out-of-five tears residency requirement to establish it as your (former) primary residence.

For full particulars, go on line to www.irs.gov and look up Publication 523.

I believe the State of California has similar rules. Obtain and read Franchise Tax Board Publication 1016 which covers California's mandatory withholding of part of the proceeds of certain real estate sales in order to prevent sellers from skipping the state without paying their capital gains tax here.

Yes, California could sue you and theoretically get a sister-state judgment and thus a lien on your out-of-state property, but with withholding at the source, that's unlikely to be necessary because they'll already have your money and it'll be up to you to file for a refund of any excess.

Re: Real Estate Tax Law

When escrow closes on the sale of the property, the title company will pay over to the State 3.3% of the sales price to cover possible state taxes [there are some exceptions].