Capital gains tax for a home sold in NJ

[Taxing Matters]

I though perhaps NJ was like that, because when I was running the numbers it required me to indentify the taxpayer's county.

The New Jersery resident state income tax return does require taxpayers to include a municipality code. That code does not affect the computation of the tax at all, however. Instead, the instructions simply state that these "codes are for Division of Taxation purposes only". I did not dig much deeper than that to figure out why it is required, though my best guess is similar to ShyCat's; it is likely information gathered by the state to allocate some state funding to the municipalities or for use tax purposes. Why the software you used required it for computation of income tax I have no idea. That may just be an over abundance of caution given how the program was designed.

 

[LdiJ]

One other sticking point is that if you are not currently a New Jersey resident and selling a New Jersey property with a capital gain, the state wants an estimated payment at the closing.

I recommend that my clients do that anyway. You don't know how many taxpayers I have encountered who sold something with a big cash gain, and then spent all of the money before tax time rolled around and couldn't pay the taxes. It is best to have them pay the estimated taxes up front before they spend the money on anything else. They also get penalized for not making an estimated payment on top of that..

 

[LdiJ]

The New Jersery resident state income tax return does require taxpayers to include a municipality code. That code does not affect the computation of the tax at all, however. Instead, the instructions simply state that these "codes are for Division of Taxation purposes only". I did not dig much deeper than that to figure out why it is required, though my best guess is similar to ShyCat's; it is likely information gathered by the state to allocate some state funding to the municipalities or for use tax purposes. Why the software you used required it for computation of income tax I have no idea. That may just be an over abundance of caution given how the program was designed.

I suspect that is it. After all they are programming for 50 states and a lot of municipalities too. It is likely that they use some common elements across states.

 

[Taxing Matters]

After all they are programming for 50 states and a lot of municipalities too.

Well, not 50 states. Only 42 states have an income tax.

 

[davew9128]

Well, not 50 states. Only 42 states have an income tax.

Well...of those 8, 4 actually have income taxes in various forms, just not specifically on individuals.

 

[Taxing Matters]

Well...of those 8, 4 actually have income taxes in various forms, just not specifically on individuals.

Correct, I should have added the qualifier "individual" to income tax in there.