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Chris Kopf Coldwell Banker Mountain Properties

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Selling Your Crested Butte Home 2% Colorado Tax

June 16, 2019 By Chris Kopf

Selling Your Crested Butte Home 2% Colorado Tax for Out of State Owners

Selling Your Crested Butte Home 2% Colorado Tax – If you are you a second homeowner in Colorado, and you are an out-of-state owner – you are subject to a 2% Tax on the sale of your real estate?

The tax is ONLY due on the NET PROCEEDS from the sale. It is the standard practice of some Title Companies to deduct 2% of the SALES PRICE of the real estate transaction for out-of-state owners. You should check your Seller Settlement Statement.

My correspondence to a Title Company on behalf of my Crested Butte Seller client:

“The out of state seller is required to pay 2% only on the gain of the sale of the property. I think it is not serving the public (our Seller clients) for  Title Company to automatically deduct 2% of the Sales Price on the Seller Settlement Statement, because this assumes the Sales price is 100% “gain” or profit.”

If a seller bought land and built a home there is no way for the title company to know what the effective basis is. And yes the seller may also have spent $ on remodel that they could also add to their basis -plus closing costs will be deducted from the gain… etc.

Per Instructions on the back of form DR1083 Information with Respect to a Conveyance of a Colorado Real Property Interest – https://www.colorado.gov/pacific/sites/default/files/DR1083.pdf

“Normally Colorado tax will be due on any transaction upon which gain will be recognized for federal income tax purposes. Gain will normally be recognized for federal income tax purposes any time the selling price of the property exceeds the total of the taxpayer`s adjusted basis in the property, plus the expenses incurred in the sale of the property. The taxpayer`s adjusted basis of the property will normally be the taxpayer`s total investment in the property, minus any depreciation thereon he has previously claimed for federal income tax purposes.”

DR 1083 (10/17/13), COLORADO DEPARTMENT OF REVENUE, Denver, CO 80261-0005, www. TaxColorado.com

Selling Your Crested Butte Home 2% Colorado Tax

The Response from the Title Company’s Legal Department:

“The withholding tax is made in anticipation of the Colorado income tax that will be due on the gain from the sale (quoting from the instructions on the form). It is essentially a prepayment of the tax and the seller/taxpayer must then submit a tax return to claim any refund. The procedure is very similar to the FIRPTA withholding tax which is also a prepayment on any federal income tax which may be due.”

Selling Your Crested Butte Home 2% Colorado TaxI am not a CPA nor an Attorney – but do the math

I am not a CPA nor an Attorney, and I suggest you send this to your CPA for their professional advice. Do the math – the Sales Price will never be 100% Gain or Net Proceeds on the Sale of a property in Colorado unless the basis is $0.00.

If you are a seller and reside out of the state of Colorado, then you might want to consider instructing the Title Company that you will file with the State of Colorado yourselves.

Specifically – that you elect to sign the Affidavit DR 1083 – and will be checking box “e” “Affirmation of no tax reasonably estimated to be due to no gain on sale signed” (Otherwise the Title Company will withhold and disburse 2% of the SALES PRICE (not the gain) to the Colorado Dept. of Revenue… and then you will have to go file with the State of Colorado and ask for YOUR money back (and months later you may get it back).

How can I help you with your Crested Butte Real Estate Needs?

Customer service, hard work and attention to detail are the keys to my satisfied clients.

Contact me to help you.  I have been in your shoes – as both a Second Home Buyer and Seller here in Crested Butte.

The Crested Butte area offers a wide variety of properties including ski in/ski out single family homes, ski-in/ski-out condominiums, lake and river frontage properties, golf course property, quality homes in Downtown Crested Butte, and true fine mountain homes on acreage.

Free Books Chris KopfDownload Free Book

Click to download Your FREE BOOK – The Complete Guide to SELLING Your Mountain Dream Home – Quick and Easy Tips to Help You Sell Your Crested Butte Home

To see Crested Butte Homes For Sale or search the MLS – visit ChrisKopf.com.

If you considering Selling your Crested Butte home and are interested in finding out what your existing property is worth – call me. How is the Crested Butte Real Estate Market doing?

The Crested Butte Real Estate Market is very active. Click this link to see my monthly Crested Butte Real Estate Market Reports.

I have consistently been a Top Real Estate Agent in Crested Butte, and I appreciate the opportunity to earn your business and be your Crested Butte Real Estate Agent.

Chris Kopf

Broker / Owner
Global Luxury Property Specialist
Coldwell Banker Mountain Properties
Chris.Kopf@CBMP.com
(970) 209-5405

Top Crested Butte Real Estate Agent

 

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Chris Kopf, Coldwell Banker Mountain Properties
305 6th Street
Crested Butte, CO 81224
  • Chris.Kopf@CBMP.com
  • (970) 209-5405

Testimonials

Bobby Nichols

"The first moment we met Chris, my wife and I knew he was all about what is happening in real estate sales in Crested Butte. He knows his job, the marketplace and the innovative ways to market your home in today's electronic internet space. A real professional that understood us and our needs in handling a very successful sales transaction. "

 
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:45:19-07:00
"The first moment we met Chris, my wife and I knew he was all about what is happening in real estate sales in Crested Butte. He knows his job, the marketplace and the innovative ways to market your home in today's electronic internet space. A real professional that understood us and our needs in handling a very successful sales transaction. "  
https://chriskopf.com/testimonials/bobby-nichols/

Jeff Hollings

Chris is outstanding! We recently bought a second home in Crested Butte and Chris did a great job throughout the whole process. He has a thorough understanding of the market and the benefits and drawbacks of various locations. He was very patient with us as our preferences evolved throughout the search. He gave us valuable information on which to negotiate the purchase. He had great follow-up during the inspection/closing process (when we were not in town) and made sure all of the commitments made by the seller were properly completed.
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:46:48-07:00
Chris is outstanding! We recently bought a second home in Crested Butte and Chris did a great job throughout the whole process. He has a thorough understanding of the market and the benefits and drawbacks of various locations. He was very patient with us as our preferences evolved throughout the search. He gave us valuable information on which to negotiate the purchase. He had great follow-up during the inspection/closing process (when we were not in town) and made sure all of the commitments made by the seller were properly completed.
https://chriskopf.com/testimonials/jeff-hollings/

James Brennan

This was our first experience trying to purchase additional land with hopes of building a home. Chris was tremendously helpful throughout the entire process and his professionalism showed.
Crested Butte Real Estate by Chris Kopf
2014-10-14T17:59:24-06:00
This was our first experience trying to purchase additional land with hopes of building a home. Chris was tremendously helpful throughout the entire process and his professionalism showed.
https://chriskopf.com/testimonials/james-brennan/

Jane Saltzman

Chris was terrific to work with. The house sold faster then I ever expected! He was particularly helpful for this second home owner that couldn't always get there to take care of house issues. Thank you Chris!!!
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:49:37-07:00
Chris was terrific to work with. The house sold faster then I ever expected! He was particularly helpful for this second home owner that couldn't always get there to take care of house issues. Thank you Chris!!!
https://chriskopf.com/testimonials/jane-saltzman/

Georges Lussier

The thought of a short sale was intimidating, but Chris made the experience very easy with lots of guidance from start to finish. I would highly recommend Chris for any Real Estate need buying or selling.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:40-06:00
The thought of a short sale was intimidating, but Chris made the experience very easy with lots of guidance from start to finish. I would highly recommend Chris for any Real Estate need buying or selling.
https://chriskopf.com/testimonials/georges-lussier/

Frank Stringer

Chris Kopf is a wonderful person to work with on any real estate matter you may have in Crested Butte. He is extremely knowledgeable of all elements of the Crested Butte area. He helped us recently to buy a new second home in Skyland and the entire experience was first class under Chris's guidance. I would highly recommend him to anyone who has a real estate need in Crested Butte.
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:51:04-07:00
Chris Kopf is a wonderful person to work with on any real estate matter you may have in Crested Butte. He is extremely knowledgeable of all elements of the Crested Butte area. He helped us recently to buy a new second home in Skyland and the entire experience was first class under Chris's guidance. I would highly recommend him to anyone who has a real estate need in Crested Butte.
https://chriskopf.com/testimonials/frank-stringer/

Paul & Julie Keesee

Chris was quite helpful in showing us homes in the area we were interested in and contacted us when new listings were available. We not only consider him our realtor but also a friend.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:59-06:00
Chris was quite helpful in showing us homes in the area we were interested in and contacted us when new listings were available. We not only consider him our realtor but also a friend.
https://chriskopf.com/testimonials/paul-julie-keesee/

Jim & Sandra Wickham

Chris' patience and persistence paid off for us in finding the right house for the right price. We would highly recommend Chris to any potential buyer.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:06:18-06:00
Chris' patience and persistence paid off for us in finding the right house for the right price. We would highly recommend Chris to any potential buyer.
https://chriskopf.com/testimonials/jim-sandra-wickham/

Tom & Mary Aton

It was a great experience working with Chris, after showing me what I thought I wanted, he advised me of the pros and cons on the different condos and found one that I am thrilled with.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:06:31-06:00
It was a great experience working with Chris, after showing me what I thought I wanted, he advised me of the pros and cons on the different condos and found one that I am thrilled with.
https://chriskopf.com/testimonials/tom-mary-aton/

Dan Aquaviva

This agent has a very strong knowledge of the local area. He was very helpful in screening properties for potential purchase.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:26-06:00
This agent has a very strong knowledge of the local area. He was very helpful in screening properties for potential purchase.
https://chriskopf.com/testimonials/dan-aquaviva/
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Crested Butte Real Estate by Chris Kopf

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