Selling house

[Am076]

I am Selling a home in Colorado I lived in the house for 22 years and the last 12 years. It has been rental property. When I close on the property in 2025 will Taxes be deducted immediately from the net proceeds from the sale Or will I pay the taxes when I file in 2026?

[AmyC · Accepted solution]

The IRS expects payment the same quarter you make the money. You will most likely need to make a Payment at that time. If you owe the IRS over $5,000 at tax time, you automatically receive penalties and interest for the substantial underpayment.

You may want to go through the estimated payments section of the program to help you prepare for the sale of the house.

You can make a payment to CO Payments | Department of Revenue - Taxation.

Great job planning ahead.

[Am076]

Amy, THANK YOU for replying & answering my question.  

Am I able to do the deductions for home improvements over the past years the house was leased out?  & 

Am I able to deduct the improvement amounts from the sale proceeds before paying any taxes to IRS or Colo? 

If I’m purchasing another home with the sale proceeds will taxes still need to be paid within the quarter that the home is sold?