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MargaretOCA
Level 2

I just sold land in Wisconsin that was part of my divorce settlement in 2013. Sale price $120,000 and settlement value was $110,000. Will I be taxed, living in CA?

I've lived in CA since 2012. Are there capital gains that will be taxed on this land sale?
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Accepted Solutions
Hal_Al
Level 15

I just sold land in Wisconsin that was part of my divorce settlement in 2013. Sale price $120,000 and settlement value was $110,000. Will I be taxed, living in CA?

In Wisconsin, taxpayers are allowed a deduction of 30%,  on long-term capital gains, or 60% if the capital gain resulted from the sale of farm assets.  Unfortunately, that won't do you much good, as California taxes capital gains as ordinary income.

 

Your capital gain will be the $110,000 net proceeds less your cost basis.  Cost basis is usually what you and/or your ex originally paid for it.  Inherited or gifted property might have a different cost basis.  When entering the sale, in TurboTax, show the full sale amount (what's on the 1099-S, probably $120,000) as sale amount and show the $10,000 difference as expenses of sale. 

 

 

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5 Replies
Critter-3
Level 15

I just sold land in Wisconsin that was part of my divorce settlement in 2013. Sale price $120,000 and settlement value was $110,000. Will I be taxed, living in CA?

Yes there are and yes you do pay taxes on the gain ... you will get a 1099-S form at the closing to report the sale on the Sch D ... failure to do so will insure an ugly IRS letter in a couple of years. 

 

https://ttlc.intuit.com/questions/2583688-sale-of-a-second-home-or-land

tbrown21
Level 3

I just sold land in Wisconsin that was part of my divorce settlement in 2013. Sale price $120,000 and settlement value was $110,000. Will I be taxed, living in CA?

You are taxed by your resident state on all your income, but you should be able to take a credit on your resident state for taxes paid to other states on all income that was taxed by the nonresident state, so you are not doubled taxed.

TomD8
Level 15

I just sold land in Wisconsin that was part of my divorce settlement in 2013. Sale price $120,000 and settlement value was $110,000. Will I be taxed, living in CA?

To elaborate on @tbrown21 's answer:

A capital gain on the sale of property located in Wisconsin is taxable by Wisconsin.  It is also taxable by your resident state of California, but you'll be able to claim a credit on your CA return for the taxes paid to WI.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
Hal_Al
Level 15

I just sold land in Wisconsin that was part of my divorce settlement in 2013. Sale price $120,000 and settlement value was $110,000. Will I be taxed, living in CA?

In Wisconsin, taxpayers are allowed a deduction of 30%,  on long-term capital gains, or 60% if the capital gain resulted from the sale of farm assets.  Unfortunately, that won't do you much good, as California taxes capital gains as ordinary income.

 

Your capital gain will be the $110,000 net proceeds less your cost basis.  Cost basis is usually what you and/or your ex originally paid for it.  Inherited or gifted property might have a different cost basis.  When entering the sale, in TurboTax, show the full sale amount (what's on the 1099-S, probably $120,000) as sale amount and show the $10,000 difference as expenses of sale. 

 

 

View solution in original post

MargaretOCA
Level 2

I just sold land in Wisconsin that was part of my divorce settlement in 2013. Sale price $120,000 and settlement value was $110,000. Will I be taxed, living in CA?

Thank you, I appreciate the details in your answer. This helps alot.

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