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Are the VT Land Gains Tax and VT Withholding Tax (paid from funds at closing) entered as deductions in the taxes paid section, or do they count as part of the cost basis?
Money was withheld at closing to pay these taxes. I'm unsure which way they should be entered into TurboTax. They are taxes, but are they deductions, or are they costs associated with closing that will increase my cost basis?
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Are the VT Land Gains Tax and VT Withholding Tax (paid from funds at closing) entered as deductions in the taxes paid section, or do they count as part of the cost basis?
The Vermont Land Gains Tax is a flat tax rather than a marginal tax like the income tax. That means the highest applicable tax applies to the entire gain.
For the Vermont Withholding Tax:
“When Vermont property is sold by a nonresident of Vermont, the buyer is required to withhold 2.5% of the amount paid for the transfer and transmit this amount to the Vermont Department of Taxes within 30 days of the sale. The withheld funds are either applied to your income tax liability from the sale of the property or returned to you when you file your income tax return.:
To record this sale in TurboTax:
Select the “Wages & Income” tab
Press the “I’ll Choose What I Work On” button
Scroll down to the “Investment Income” section
Start or Update the “Stocks, Mutual Funds, Bonds, Other” section
Answer Yes on the “Did You Sell Any Investments?” screen.
If you get the Summary of All Accounts screen instead, click “Add Another Account”.
Answer Yes or No to “Did Your Bank Provide a 1099-B”
Enter the information about your sale and click the “Add More Details” checkbox
Scroll down on the “More Info About This Sale” screen
Click the “Second Home” or “Land” radial button for your sale
On the next screen (“Enter Second Home Sale Information” or “Enter Land Sale Information”), enter the information about your sale. If the amount shown on your 1099-S does not already reflect a reduction of your proceeds due to the Land Gains Tax, subtract the Land Gains Tax from your “Net Proceeds”.
then click the “Income Taxes Were Withheld for This Sale” radial button
Enter the Vermont Withhold Tax amount as Sate Taxes Withheld on This Sale, and enter VT as the state.
Continue entering the rest of the information about your sale and press the “Continue” button until you return to the “Your 2015 Income Summary” screen
Note that the amount of the Land Gains Withholding Tax will be included on Schedule A as income taxes paid and withheld while the Land Gains Tax is shown as reducing your proceeds from the sale.
You can get more information about the Lands Gains Tax at http://tax.vermont.gov/property-owners/real-estate-transaction-taxes/land-gains-tax
You can get more information about the Lands Gains Withholding Tax at http://tax.vermont.gov/property-owners/real-estate-transaction-taxes/land-gains-withholding-tax
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Are the VT Land Gains Tax and VT Withholding Tax (paid from funds at closing) entered as deductions in the taxes paid section, or do they count as part of the cost basis?
The Vermont Land Gains Tax is a flat tax rather than a marginal tax like the income tax. That means the highest applicable tax applies to the entire gain.
For the Vermont Withholding Tax:
“When Vermont property is sold by a nonresident of Vermont, the buyer is required to withhold 2.5% of the amount paid for the transfer and transmit this amount to the Vermont Department of Taxes within 30 days of the sale. The withheld funds are either applied to your income tax liability from the sale of the property or returned to you when you file your income tax return.:
To record this sale in TurboTax:
Select the “Wages & Income” tab
Press the “I’ll Choose What I Work On” button
Scroll down to the “Investment Income” section
Start or Update the “Stocks, Mutual Funds, Bonds, Other” section
Answer Yes on the “Did You Sell Any Investments?” screen.
If you get the Summary of All Accounts screen instead, click “Add Another Account”.
Answer Yes or No to “Did Your Bank Provide a 1099-B”
Enter the information about your sale and click the “Add More Details” checkbox
Scroll down on the “More Info About This Sale” screen
Click the “Second Home” or “Land” radial button for your sale
On the next screen (“Enter Second Home Sale Information” or “Enter Land Sale Information”), enter the information about your sale. If the amount shown on your 1099-S does not already reflect a reduction of your proceeds due to the Land Gains Tax, subtract the Land Gains Tax from your “Net Proceeds”.
then click the “Income Taxes Were Withheld for This Sale” radial button
Enter the Vermont Withhold Tax amount as Sate Taxes Withheld on This Sale, and enter VT as the state.
Continue entering the rest of the information about your sale and press the “Continue” button until you return to the “Your 2015 Income Summary” screen
Note that the amount of the Land Gains Withholding Tax will be included on Schedule A as income taxes paid and withheld while the Land Gains Tax is shown as reducing your proceeds from the sale.
You can get more information about the Lands Gains Tax at http://tax.vermont.gov/property-owners/real-estate-transaction-taxes/land-gains-tax
You can get more information about the Lands Gains Withholding Tax at http://tax.vermont.gov/property-owners/real-estate-transaction-taxes/land-gains-withholding-tax
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