There’s a new tax law that makes real estate sales much more difficult.
The latest update to the Estate Sales Tax Act (ESTA) is on track to make it even harder to make the tax-free sale of real estate to a federal, state, or local government.
If you sell a house or apartment in a major city, you are subject to the ESTA tax, as are any sales made on or through a mobile home park, or any other type of sale where the buyer is located in a state where the sales tax is applicable.
But there’s one other big change to the current law that is also expected to make your sales much harder to avoid: it will make the sales taxes of federal, State, and local governments (FSLG) and local agencies (LAGG) in the same cities and counties taxable.
As we reported on Monday, this change will make it more difficult for FSLGs and LAGGs to collect sales taxes from their employees.
If a federal FSLGA collects sales taxes on the sale of a home in New York City, for example, and the LAGGA collects them in Washington, D.C., the federal FLSGA must pay the LNGGA sales tax.
The new change will also make it much harder for LAGGs to collect property taxes.
This is because federal FTLGs, including the LFGs, will now be required to collect taxes from local governments, which are exempt from the sales and use tax.
This is one of many changes to the estate tax law expected to increase the amount of money you’ll need to collect on your tax bill.
But if you’re wondering what’s up with that $30 million sales tax that you’ve been racking up on your federal, LAG, and FSL tax return, you should know that you’ll still need to file a federal and state income tax return.
According to the IRS, if you sell your home in a jurisdiction that collects sales and/or use taxes from its residents, you will be subject to a 10% excise tax.
That excise tax is only payable by sellers who have a residence in that jurisdiction.
The excise tax will be $1,000 per sale or $10,000 for a single sale, and you will have to file the same returns as you would for any other taxable sale.
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If you or anyone you know is facing any form of tax-related uncertainty, we urge you to contact a tax professional right away.