My parents just sold their 2nd vacation home in Asia 2 weeks ago. They live in NYC. They'll need some guidance in tax prep for 2024.
1. Estimated tax payment for capital gains - How to utilize TurboTax to make estimate quarterly payments?
2. Does it matter if the quarterly est payments differ in amounts, as they gather all the info over time to make more precise calculations?
3. Which forms need to be filled out along with estimated payments?
4. Since it's outside of NY, there is not tax implications for NYS or NYC, correct? TurboTax automatically copies over gains to state returns. What is the best way to make adjustments?
Also which turbotax product is best for this situation? Thanks!
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Yes, let's address these questions.
For NY filings in TurboTax Home and Business, I don't see a section to allocate investment g/l. Since the second home was outside of U.S., it makes sense that it doesn't require to pay NY taxes.
Here is a section I found to make adjustments to federal income:
-> Investment Income from U.S. Government Agencies -> Other Investment Income Exempt from New York
Is this the right place to make adjustments? Thanks.
Also, is there any document (by NY or IRS) that clearly state that second home outside of U.S. doesn't require to pay state taxes? Thanks.
Additional question re: 1099-S. Since the vacation home is a foreign property in Asia, we didn't receive any 1099-S. Are we required to file 1099-S ourselves? How can we do that?
1. They live in NY. That is their resident state so it taxes all income. Frequently Asked Questions about Filing Requirements states: As a resident, you pay state tax (and city tax if a New York City or Yonkers resident) on all your income no matter where it is earned.
2. No place to made adjustments since it is all taxable to federal and state.
3. There are documents which state all worldwide income is taxable to resident. There are some exceptions. If you feel you may qualify at the federal level, go through this quick quiz. For NY, you must be out of the country 450 days out of 548, see State of New York Taxation & Reporting of Foreign Income.
4. You don't need the 1099-S form to enter the sale of a second home. It is just a question for the IRS to match up forms if you have one. The sale goes on sch D and is entered in the same section as stocks and bonds. You will select sale of home. For help entering, see Where do I enter the sale of a second home, an inherited home, or land on my 2023 taxes?
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