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Ga sold primary residence 12 yrs. sold for $30,000 more than purch.w/improvements. closng atty picked $79000 as gain & sent 3% tax to Ga. Why? not on closing statement.

Forum|Forum|7 years ago
June 6, 2019
7 replies
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GA tax on primary residence sale

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Best answer by Hal_Al

See https://s3.amazonaws.com/emma-assets/40ecb/1f4578ef86728c0e49ebb61cd22d6100/Withholding_Requirements.pdf

Which says, in pertinent parts

The rate of withholding is 3 percent of the sales price. An alternative for calculating the withholding is to use the seller’s gain. In order to apply the withholding to the gain, the seller must complete form ITAFF2 (Affidavit of Seller’s Gain) attesting to the amount of the taxable gain.

The buyer or transferee is required to provide the seller with a copy of the G- 2RP or other form for the seller to file with the seller’s income tax return. (This form documents the withholding)

https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/TSD/Form/TSD_Withholding_on_Sales_or_Transfers_of_Real_Property_Non-Residents_G2RP.pdf

DoninGA

Employee

Look at your closing documents including the HUD-1. The state of Georgia does not have any type of tax on the sale of a personal residence.
Your gain on the sale of a personal residence is the Sales Price minus the Adjusted Basis (Purchase price plus the cost of improvements) minus the sales expenses.
Where on the HUD-1 is this 3% shown? How did the attorney arrive at the $79,000 gain? Have you got an explanation from the attorney?

Critter

Employee

Don't get hung up on why ... just understand you will simply file a GA return to get back the excess withholding.

Carl11_2

Employee

You'll "settle up" with the state, as well as the IRS, when you file the tax return for the tax year in which you sold the property. So don't concern yourself with this at this time. It wouldn't matter if the closing attorney sent $50,000 to the state at the time of closing. You'll get the excess refunded to you when and if you file a return for that tax year.

S

sharonlcriderAuthor

Thank you. Ga is just greedy for taxes.

S

sharonlcriderAuthor

The State of GA DOR said the title atty needed to file a corrected form for me to get the taxes back. Atty refuses to help or send a corrected form. I've looked at the GA 500 form, there is no place to show anything but that I paid in $3000 in taxes. I had no income in GA. I can't get anyone to help, I even went to a HR Block place and he didn't know what to do. Now after talking to a DOR employee in the With holding dept in GA, he tells me "im in a bad place" because this idiot atty won't cooperate to correct the form. So I have to complete my own corrected G2RP form, complete and affadavit showing the amounts that there was a loss , not a profit, have it notarized, and send supporting documents to them. GA is one messed up State...and in especially the North GA Mountains....corrupt!!!!

DoninGA

Employee

@sharonlcrider - If you are not a Georgia state resident, then see the answer below from Hal_Al

Hal_AlAnswer

Employee

See https://s3.amazonaws.com/emma-assets/40ecb/1f4578ef86728c0e49ebb61cd22d6100/Withholding_Requirements.pdf

Which says, in pertinent parts

The rate of withholding is 3 percent of the sales price. An alternative for calculating the withholding is to use the seller’s gain. In order to apply the withholding to the gain, the seller must complete form ITAFF2 (Affidavit of Seller’s Gain) attesting to the amount of the taxable gain.

The buyer or transferee is required to provide the seller with a copy of the G- 2RP or other form for the seller to file with the seller’s income tax return. (This form documents the withholding)

https://dor.georgia.gov/sites/dor.georgia.gov/files/related_files/document/TSD/Form/TSD_Withholding_on_Sales_or_Transfers_of_Real_Property_Non-Residents_G2RP.pdf

DoninGA

Employee

That is applicable to Georgia non-residents who are selling property in Georgia. Not applicable for a Georgia resident who is selling property in Georgia.
And I learned something new....