sold vacant lot

[jnazareno]

What is the name of your state? ca

I sold a clients vacant lots in california that was located in Florida,
he asked as to how Uncle Sam would or could know if he didn't pay the capital gain taxes on the lots. ( i directed him to a tax person, but iam curious to this answer as well)

thanks

John

 

[Snipes5]

He will receive a form 1099-S, and so will the IRS and the state of California.

He will have to list the capital gains on his federal return, AND he will have to do a California return to get back some of the tax that they automatically withhold on such transactions.

If he doesn't file correctly, the state of California will eventually get him, and his little dog, too.

Snipes