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  1. #1
    Join Date
    Aug 2011
    Posts
    1

    Default Capital Gains Liability on an Interstate Transaction

    My question involves real estate located in the State of: Indiana

    Considering selling bare land in IN, but have residency in California, would I need to pay capital gain taxes in IN only, or would I need to pay CP taxes for the state of CA too?

    Second part of the question, to off-set the capital gains I would consider making a contribution to a Foundation or a Donor-advised Fund. Would any fund paperwork need to be filed prior to close of land sale? (Or do you just need to make a contribution to a fund/Scholarship before taxes are due for that same sale year?)

    Thank you.

  2. #2
    Join Date
    Sep 2010
    Posts
    19,591

    Default Re: Capital Gains Liability on an Interstate Transaction

    You owe federal and Indiana tax on the sale. You should talk to a tax consultant about the charitable aspects (often if the amount donated is substantial, the charity itself can advise you). If you're talking about giving the entire gain away, there are things you need to do prior to the sale closing. If you're only talking about part of the gain, I don't think there's any specific things that make donation made from the gain any different than any other charitable contribution. You need to check if Indiana withholds some of the gain payment at time of sales (some states do).

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