Real estate tax withholding partial exemption due to work related move

[Eohx211]

Hi all, In need of some advice. I'm in the process of selling my condo, and currently in escrow. Escrow sent me a 593 tax withholding form to complete and not entirely sure how to proceed. I've lived in the condo as my primary residence for 650 days (just shy of 2 years) so do not qualify for the two year primary residence full exemption but I do qualify for the partial exemption since I moved to another state more than 50 miles for a new job. I originally paid $680k and am selling for $735k so based on the withholding calculation the $55k capital gain should be exempt from tax.

What would be my next steps from here? Do I still fill out the 593 real estate tax withholding form or am I supposed to ask escrow for another form to fill out? This form doesn't have any information listed for me to select the partial exemption due to work relocation. It also looks like they'd need to capture and send the franchise tax board the sales price Withholding amount regardless?

Also, am I supposed to fill out the 1099-s form? Have not received it from escrow as well.

Any advice and help would be appreciated.

purchased home: 5/21/2021

Moved out of state and rented home: 6/1/2023

sold home/date of closing: 9/10/2024

Thank you in advance

[Bsch4477]

Part 3 line one is your exemption from tax related to the exclusion. 

[Mike9241]

if you rented the property at fair rental you were supposed to take depreciation. that reduces your basis and is not eligible for the HSE, so your taxable gain - sec 1250 recapture will be equal to the depreciation you should have taken. if you did not take depreciation run to a tax pro because the tax laws provide that you must recapture the depreciation you would have been allowed to take even in you never actually took it. Your pro-rata HSE will be more than the $55K so only the depreciation recapture, if any, would be taxable.  

593 info

https://www.bing.com/videos/riverview/relatedvideo?q=593+tax+withholding+form&mid=4B780B042E5D0BD21B... 

[NCperson]

@Eohx211 the 1099-S form will come from the lawyer / closing agent.  They are the ones required to generate it.  

And run to a tax pro! this could get complicated! 

[NCperson]

@Mike9241 what us "HSE" ?

You are not suggesting that the OP is ineligible for the partial exclusion, but simply that calculating that capital gain and what is eligible for the partial exception is "complicated", right? 

[Mike9241]

not at all. The Home Sale Exclusion he would be entitled to based on what he provided would be 650/730 * 250,000 which is more than $200K. so except for the depreciation recapture the $55K in gain wouldn't be taxed. I also rephrased my answer in the original thread. 

[Eohx211]

Sounds good. Thanks everyone for all the input. Would the depreciation recapture need to be done at time of home sale, or would that need to be done when I file my 2024 taxes? I did not indicate or deduct any deprecation in 2023