Investor · brentwood, CA · Member since 2016 · 1k+ posts · 730 votes
8y
You can research it yourself, but I think what you are referring to is actually an advance withholding mechanism on any income or franchise tax that would be due IF there is gain on the sale of the property to the seller.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
8y
If it's an excise tax every time title transfers, then you'll have what WA does (1.7%) and Philly does (4%).
We assign only, obviously. Own it for 2 seconds? 3.4% of gross goes poof.
If it's just an extra profit or cap gain tax, it will be much less in absolute $ at least. WA is exploring one of those also, but not for houses. Will move up my commercial sales timeline if they get serious. Our state is trying to make up for 0 income tax. Your state? Just mo money!
Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
8y
@Jake Goehring The good news is it's not actually an extra tax. It's more of prepayment of tax that may be owed to the state. You, as the wholesaler, would generally not be effected by it. It could effect the seller, but even then there are a number of exemptions that may come into play (i.e. the sale of property is for less than $100,000; the sale of property at a net loss for income tax purposes; the property qualifies as the seller's principal residence; etc).
Here's some more reading on the subject if you're interested, but it shouldn't be a big deal: