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PuzzledbyHARPTA
New Member

Hi, I am not sure how to report HARPTA Withholding shown on my Settlement Statement for a property sold in 2017. Is it a valid selling expense? Where do I capture it?

I understand HARPTA is not a tax (merely an estimate of HI income taxes that might be due following a sale of property), so, presumably, I may not include it as other taxes paid in my itemized federal return, or am I wrong?

It seems the simplest thing would be to include it as a selling expense in connection with the property sale (a condo in this case).  Most other expenses that reduced the proceeds I received from the sale count as valid selling expenses, but does HARPTA withholding also count?  If not, where do I report the HARPTA withholding in my federal return?

Thank you in advance.

5 Replies
IsabellaG
Expert Alumni

Hi, I am not sure how to report HARPTA Withholding shown on my Settlement Statement for a property sold in 2017. Is it a valid selling expense? Where do I capture it?

You are wrong. You can include it as a state tax paid. It is withholding of HI state tax that you'll get credit for when you file your Nonresident Hawaii tax return. Enter the withholding under Estimates and Other Taxes, under Other Income Taxes Paid in 2017, specifically Withholding not already entered on a W-2 or 1099. See the screenshot.

Then enter the amount and the state for the withholding. Then proceed to prepare your HI return, and you'll get credit for the tax you already paid. You'll either get a refund or owe additional tax depending on your situation.

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haretx
New Member

Hi, I am not sure how to report HARPTA Withholding shown on my Settlement Statement for a property sold in 2017. Is it a valid selling expense? Where do I capture it?

Hi

 

A related question related to the Hawaii tax withheld at settlement -  If the sale of the real estate was a trade / business rental activity reported on Schedule C, would the HI taxes be deductible for Federal taxes on the Schedule C as a business tax expense rather than the Schedule A?

 

Critter
Level 15

Hi, I am not sure how to report HARPTA Withholding shown on my Settlement Statement for a property sold in 2017. Is it a valid selling expense? Where do I capture it?

NO. 

macrammer
New Member

Hi, I am not sure how to report HARPTA Withholding shown on my Settlement Statement for a property sold in 2017. Is it a valid selling expense? Where do I capture it?

My 2019 taxes showed no capital gain for my condo sale in Kauai.  it took me almost 9 months to finally get my 7.5% HI withholding.  Hawaii filed a 1099 for 2020 showing my :refund" of my sales proceeds.  It was not a refund.  it was simply my sales proceeds that my 2019 taxes showed no gain.    I did not itemize in 2020......It seems IRS is holding up my 2020 taxes due to this 1099???

DaveF1006
Expert Alumni

Hi, I am not sure how to report HARPTA Withholding shown on my Settlement Statement for a property sold in 2017. Is it a valid selling expense? Where do I capture it?

Amend your 2020 return and include the 1099 as income and then subtract it out. Follow these steps in performing this action.

  1. Log into Turbo Tax assuming you use Turbo Tax online
  2. When you reach the landing page, scroll to the bottom where your tax returns and documents are.
  3. Select 2020, and click on the option to amend and change return.
  4. Answer the questions about why you are amending
  5. Once you begin working in your return, your refund monitor will reset to 0. 
  6. Go to federal>income and expenses>Other Common Income>
  7. i assume it's a 1099 Misc. If so, select Form 1099-MISC>start
  8. As you are filling in the information, be sure to check that your form has other information in Boxes 1-17. You will want to report if you paid federal or state tax on this, if applicable.
  9. Finish out the interview. Make sure you answer the questions carefully relating to if this was a job. it was also not an intent to earn money.
  10. Now since you have entered this as income, you may subtract it out by:
  11. Go to federal>wages and income>less common income>show more
  12. Go to Miscellaneous Income, 1099-A, 1099-C>start
  13. Go to other reportable income>start
  14. The second screen should be entitled Other Taxable Income
  15. In the description, give reference to the 1099-MISC(or NEC) if that is the case, that these were sales proceeds that were already reported in you original return
  16. Here enter the amount as -xxxx, which will simply negate the amount from the 1099 MISC. 
  17.  
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