Level 6

Washington state Long-term Capital Gains Tax

Forum|Forum|3 years ago
March 24, 2023
2 replies
17 views

I'm trying to confirm the filing threshold for this new tax. Per the text of the law the penalty is assessed if a return isn't filed if tax is owing. There is a $250,000 deduction per tax return, so I'm hoping that means if you don't owe the tax, you don't need to file.

Can anyone confirm this for me?

This topic has been closed for replies.

qbteachmt

Level 15

Did you look at WA resources?

https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax

https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax/do-you-owe-capital-gains-tax

"Amount

Was your amount of Washington state long-term capital gains more than $250,000 after all exemptions, such as real estate or investments held in individual retirement accounts? See RCW 82.87.050.

If you answered Yes to the above question, you may owe Washington state capital gains tax."

https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax/frequently-asked-questions-about-washingtons-capital-gains-tax

"How are exemptions to the capital gains tax applied?

Exemptions from Washington’s capital gains are based on transactions. This means you may owe capital gains tax on some transactions and not on others."

"Deductions and exemptions
There are several deductions and exemptions available that may reduce the taxable amount of long-term gains, including an annual standard deduction of $250,000 per individual. In the case of spouses or domestic partners, the combined standard deduction is limited to $250,000 whether they file joint or separate returns."

It's been challenged and ruled unconstitutional and invalid, but there is a stay on that action, so for right now, it applies.

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PamCAuthor

Level 6

Thank you for your reply. I did review these resources. However they seem to all refer to whether you may OWE the tax.

Many tax returns have a filing requirement even when no tax is owed as the taxpayer has to file the return to prove that fact by providing information about basis and deductions. I'm trying to determine if such a filing requirement exists for this tax.

qbteachmt

Level 15

Did you understand this part:

"How are exemptions to the capital gains tax applied?

Exemptions from Washington’s capital gains are based on transactions. This means you may owe capital gains tax on some transactions and not on others."

You might need to work through the form to see what applies or is excluded. There is no one answer. Well, there is one answer = It Depends.

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qbteachmt

Level 15

This topic includes the ability to Vote to include this in Lacerte, and that the ruling was made just today, and the provision is upheld. You should vote:

https://proconnect.intuit.com/community/lacerte-tax-idea-exchange/wa-capital-gains-tax-available-to-report-thorough-lacerte/idi-p/247510

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