Rental property sale state tax withheld: Do I add that to the expenses of the sale, the estimated taxes in deductions or wait until 2024 to claim the actual tax paid?

[theo285814]

The state I sold the property in allowed me to send information prior to the close of sale to help provide a better estimate of my likely tax burden, so the withholding should be close to what the actual tax will be.  

[PatriciaV]

Sales tax paid with the closing of the sale of rental property would be reported 1) in the year you actually paid the taxes and 2) under Deductions & Credits >> Other Income Taxes >> Withholding not already entered.

Taxes of any type are not deducted from the sale proceeds; they're entered separately.

[theo285814]

Thanks for the reply!  So the state withheld ~$4000 at time of sale.  When I calculated actual tax due with turbo tax, it was ~$2000 (so I’m supposed to get a state tax refund). Do I enter the amount withheld or the amount of tax calculated?

[AmyC]

You are filing a tax return for 2023. If you have paperwork showing you paid the $4,000 in 2023, you can claim it. If it was paid in 2024, you must wait.

If you are calculating estimated payments for 2024, you would add the $4000 paid in 2024.

[theo285814]

Thank you!  So do recording tax and transfer tax go in the same section as the withholding?

[RobertB4444]

No, recording tax and transfer tax are taxes that you paid and they are deductions.  Withholding is money that was taken in anticipation of taxes that might be due.  

@theo285814