I sold a home in another state--do I have to pay tax?

[Amy Turnbull]

I appreciate responses about this. I don't want to get dinged next year or whenever if I need to pay sales tax. I mean, I have paid my income tax but pretty sure Massachusetts wants a piece of the action!

[Will Barnard]

Your tax questions here, and after the fact, are a bit disturbing. These are questions an investor should be asking their accountant BEFORE the investment was made. None the less, if you reside in CA and invest in another state, you will pay your federal income taxes for any profits (for flips) or capital gains (for buy and holds over 1 year where intent was to buy and hold) and you will pay CA state income taxes as well. Additionally, you should have an entity formed in the state in which you invested which would hold the asset and as such, file a return for it. Typically, if an OLC was used for buy and hold, you would have a K1 from that LLC which "passes through" to your personal tax return.

I Strongly urge you to seek professional tax advice rather than asking this question on an open forum from non tax professionals. I am not a tax professional and as such, this should not be co trued as tax or legal advice, just my experience from investing from CA out of state.