How to record non-resident property sale in HI

[bptsj]

I have owned a rental property in HI for 8 years which I have always rented and never lived in. I have been reporting the income/expenses on my Federal return and paying HI the GE tax. I sold the property in Feb 2022. I am filing a state return in HI for the sale of the property.     What form do I record the sale on the HI property? So far all I've done on the HI state form is let TT update the state form from Federal.

Also, at the time of the sale, I paid an estimated tax to HI and received an N288-A form showing the amount paid. Do I need to send HI a copy of the N288-A form, a filled-out N288-C form, and a copy of my final Federal tax return?

Thanks ....

[Vanessa A]

Who did you received the N288-A from?  This is a form that you are to send in with our estimated tax payments when you sell a property as a non resident of Hawaii.  

The N288C is for a refund of the amount you paid? ". If available, the transferor/seller should file the appropriate tax return instead of filing Form N-288C"  This is a form you would have filled out prior to tax season to claim a refund of amounts you overpaid.  At this point, this is not a form you would fill out for a refund. 

As a non resident in Hawaii, you would fill out a N-15 to claim a refund of any overpayment you made when you paid estimated sales tax on the sale of your property.

You stated that you did not get past having TurboTax transport your information.  As you walk through all the questions in TurboTax you will be asked the questions needed to fill out the Non-Resident form and properly report the sale of your property as well as claim any refund you may be entitled to or pay any additional amount if you did not pay enough.  Be sure to read and answer each question so you get to the right sections to complete your return properly. 

[bptsj]

I received a copy of the N288-A that the Escrow company sent to the state of HI. It also includes a copy of the check sent to the state of HI from my escrow funds.

Tentatively, TT reports I owe HI a lot less than what is on the N288-A. So, this means I need to file an N288-C for the refund of the overpayment?

Thanks

[PattiF]

Yes, you would file Hawaii N-288C to apply for a refund of the overpayment. Many states withhold a higher amount than is required for non-resident property sales and then issue a refund. 

Here is a link to Form N-288C that is able to be e-filed.

@bptsj 

[bptsj]

I ran the TurboTax for Hawaii but did not see anywhere it asked if the property was sold. It did prompt for the gross receipts on the property for the GET tax. Also, I was never prompted to enter any estimated taxes for 2022. As it stands, TurboTax shows I owe taxes to Hawaii. I'm stuck at this point.

Is there something I can look at in forms mode to see what I'm missing?

[AmyC · Accepted solution]

1. No, the program asked about the capital gains from the federal. The state is aware the property was sold.

2. If you entered the gains and the GET tax, your HI return is nearly done.

3. You do not enter estimated payments to the state in the state return. Follow these steps:

1. Go back to federal, deductions and credits
2. Scroll down to Estimates and Other Taxes Paid
3. Select Estimates
4. Select State estimated taxes for 2022
5. Start, yes
6. enter the information

4. You can flip to Forms mode and trace issues. Be sure to use the input mode or the accuracy guarantee will be void.

[bptsj]

Thanks! Looking much better now !! The HI state return shows I get a refund and form N-288C also shows I get a refund, though it doesn't match exactly. I think the discrepancy is because the calculation on N-288C only uses the long-term gain on the HI property whereas Turbo Tax HI  state form uses the net long-term gain on Sched D, which in my case includes other items. 

Thanks for your help. 

[nr2024]

Hello all,

If you file N288C at the beginning of the year (say January 2025, for a property that was sold in January '25) and then file HI form N15 about a year later (when it's available for the year of sale), how to reconcile when filing the N15 the fact that you already got a refund with filing form 288C?

After all, the tax return calculations will be more accurate and final.

I can only see a spot for tax withheld with form 288 (in the 2023 form N15 - line 55 of form N15) but not where to show that some of it was refunded already (with form 288C).

Thanks