Tax on property sale...

[The_Twisted_Ear]

My apologies if I didn't post this question in the correct forum...

We just sold some property we owned. We owned the property for over ten years and recently moved out of state. We got "slapped" with a "out of state" fee (thousands of dollars) for being from "out of state" and selling a piece of property in Maryland. That just doesn't make any sense to me - we lived in Maryland, bought the property in Maryland, paid taxes on it for over 10 years, moved out of Maryland and now Maryland is penalizes us because we don't live in Maryland. Any suggestions?

 

[rhenderson]

What you ran into was the "withholding" non-residents. At the end of the year you are required to file an income tax return with Maryland covering the income you received from the sale. The withholding is to ensure that the state gets at least some of the money they are due for capital gains. If you were still a Maryland resident they would have access to you and/or other property to collect from. However, if you are out of state it is very difficult to collect taxes due if there were no withholding.

 

[The_Twisted_Ear]

OUTSTANDING! Actually, I only made $9K after 10+ years of owning the property. Since I sold it this January - I will file a income tax return for Maryland next year. Thanks a bunch for the information.