All Forum Posts by: Zocky Zhang

@Zocky Zhang

It sounds like you might want to hire a CPA. I am not a tax professional, and none of this should be taken as tax advice, it is just my understanding:

@Zocky Zhang I was looking into this and came across this. Hope it helps

Yes, you can claim a credit on your Maryland state tax return for local taxes paid in Pennsylvania. Per the instructions to Maryland Form 502CR (under a special note), "If you had wages subject to tax in a locality in Pennsylvania, you may file Form 502CR to claim a state and local tax credit.

thanks Francis

I live in MD, so shouldn't be I claim on Maryland state tax for city tax paid in Philadelphia and income tax paid to Pennsylvanis( since I also need to pay income tax to PA for my rental in Philadelphia )?

I shouldn't pay any of my wage tax to PA or philadelphia since I don't live in PA. 

please correct me if i'm wrong.

@Zocky Zhang You need to have a Philly tax ID which you can get online - he probably already did that when you got a rental license. I am not a CPA but I believe you will need to file Pennsylvania state tax return as well as a Philadelphia return.

@Zocky Zhang

So let me get this straight:

1.  You were living in Maryland (renting)

2.  You purchased a property in PA.  You didn't live in and never rented it.  It took 2-3 years to fix it up.  You sold it in 2019

3.  From the proceeds of the sale, you then stopped renting and bought your current primary residence in Maryland.

What you owe is long term capital gains tax and it should be paid in the year you sold the property. It's 15 to 20% of the net gain. (the difference between your investment and the sale)

Because you rented the property, you'll also have to pay depreciation recapture. This tax is paid at your normal income tax bracket rate.

Don't delay sorting this all out as penalties and interest will accrue.

What you owe is long term capital gains tax and it should be paid in the year you sold the property. It's 15 to 20% of the net gain. (the difference between your investment and the sale)

Because you rented the property, you'll also have to pay depreciation recapture. This tax is paid at your normal income tax bracket rate.

Don't delay sorting this all out as penalties and interest will accrue.

@Zocky Zhang

Did you live in it for at least two years? Either way it has to be reported. But primary residences have exclusion ($250k single and $500k for married). Had to have been primary home for 2 of 5 past years, and my accountant told me you can’t use as rentals (although others in bp seem to think differently)