Maryland Non Resident Return of Pre-Paid Real Estate Tax

[MikeinNP]

Hi All,

I couldn't find this question answered directly so I'm starting a new thread. I live in WA state and sold a house in Maryland from my father's estate. Maryland required me to deduct 8% of the sale proceeds at the time of closing. I'm hoping to get all or some of that back by filing a Maryland 505 Non-Resident form. I've downloaded Turbotax for Maryland have started completing the forms. So far, the 505 show I get a 100% return of all the 8% I paid to Maryland during the closing process.

On the Federal return I filled out Schedule D that essentially showed a $0 loss or gain because the basis for the home value was stepped up at the time of my father's passing and the value at the time of sale was only marginally higher. With fees and costs, this essentially netted the gain to $0.

The question is - If I show a net $0 gain on Schedule D, does that mean from Maryland's point of view I also don't have any gain/income from this sale and therefore I should receive all the pre-paid tax as a return from Maryland?

[MaryK4]

Correct- Maryland treats the income the same as the federal so you had no gain.  You could have applied for an exemption for the withholding at the time of the sale of the home, but now you will just receive it as a refund.

[MikeinNP]

Thank you! I looked into the exemption but there was no option expected $0 gain. None of the exemptions seem to apply so I went ahead and paid the tax. There was another form 505R that I believe could have been filled out no later than 60 days past the sale of the house, but I didn't do that and I guess I decided to just wait till tax season. I'm going to call this good and file the Maryland 505 and 505NR using TurboTax. Thank you again MaryK4!