Capital Gains Taxes
The sale of real estate in the state of South Carolina can affect your taxable income. Any profit from the sale of a home or property is considered to be capital gains. Both South Carolina residents and non-residents are responsible for this tax.
During the closing on your property, the closing attorney will withhold a portion of the sales proceeds and submit this payment to the state. As the seller, you’re required to complete a “sellers’ affidavit” showing the amount, if any, of capital gains earned from the sale. The state will require a minimum of 7% withholding for individuals and 5% for corporations.
If you are a not a South Carolina resident, you’ll be required to file a South Carolina tax return for the year of your sale. In all cases, consult with an attorney or tax accountant with any questions about taxes, withholding, and tax filings.
As always, seek professional and expert advise in determining your tax and legal requirements. We can provide a list of local attorneys and tax accountants, but we can’t offer you direct advice on these matters, only point out that you’ll need to be aware of them.
The best way to avoid or reduce your tax burden is to use a Tax Deferred Exchange. When you sell one home or property, buy a new one!