Rental property sale state tax withheld: Do I add that to the expenses of the sale, the estimated taxes in deductions or wait until 2024 to claim the actual tax paid?

Forum|Forum|2 years ago
April 7, 2024
1 reply
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The state I sold the property in allowed me to send information prior to the close of sale to help provide a better estimate of my likely tax burden, so the withholding should be close to what the actual tax will be.

TurboTax Online

PatriciaV

Employee

Sales tax paid with the closing of the sale of rental property would be reported 1) in the year you actually paid the taxes and 2) under Deductions & Credits >> Other Income Taxes >> Withholding not already entered.

Taxes of any type are not deducted from the sale proceeds; they're entered separately.

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theo285814Author

Thanks for the reply! So the state withheld ~$4000 at time of sale. When I calculated actual tax due with turbo tax, it was ~$2000 (so I’m supposed to get a state tax refund). Do I enter the amount withheld or the amount of tax calculated?

AmyC

Employee

You are filing a tax return for 2023. If you have paperwork showing you paid the $4,000 in 2023, you can claim it. If it was paid in 2024, you must wait.

If you are calculating estimated payments for 2024, you would add the $4000 paid in 2024.

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