What is the withholding amount for an out-of-state seller for a property sold for $489,000?

What is the withholding amount for an out-of-state seller for a property sold for $489,000?

• A. $5,500
• B. $9,780
• C. 2% of the purchase price or proceeds, whichever is less
• D. None of the above

Answer: (C)

The withholding amount for out-of-state sellers in Colorado is determined by a specific rate that applies to the sale of real estate. For properties sold by individuals who do not reside in Colorado, the state mandates a withholding of 2% of the gross proceeds from the sale. In this scenario, with a property selling for $489,000, the correct calculation follows from this percentage. When applying the 2% rate to the sales price, it yields a withholding amount of $9,780 ($489,000 x 0.02). This calculation adheres to the state's tax regulations for non-resident sellers, ensuring that the proper tax is withheld to cover potential income tax liabilities. The focus on the percentage of the purchase price, as noted in the correct choice, highlights the rule that governs these transactions specifically for out-of-state sellers. Understanding this percentage and how it applies to the total sale price is crucial for handling real estate sales involving sellers who are not Colorado residents.

The withholding amount for out-of-state sellers in Colorado is determined by a specific rate that applies to the sale of real estate. For properties sold by individuals who do not reside in Colorado, the state mandates a withholding of 2% of the gross proceeds from the sale.

In this scenario, with a property selling for $489,000, the correct calculation follows from this percentage. When applying the 2% rate to the sales price, it yields a withholding amount of $9,780 ($489,000 x 0.02). This calculation adheres to the state's tax regulations for non-resident sellers, ensuring that the proper tax is withheld to cover potential income tax liabilities.

The focus on the percentage of the purchase price, as noted in the correct choice, highlights the rule that governs these transactions specifically for out-of-state sellers. Understanding this percentage and how it applies to the total sale price is crucial for handling real estate sales involving sellers who are not Colorado residents.