sale of Pal Springs property,

QUESTION:
I OWN A VILLA IN PALM SPRINGS, CAL. IT'S
VALUE HAS DOUBLED IN VALUE ( APPROX. COST -
$ 250.000.00 U.S. - NOW WORTH APPROX. $ 570,000.00 U.S. ) DUE TO ILL HEALTH,
WE ARE CONSIDERING SELLING THIS PROPERTY. WHAT ARE THE CAPITAL GAINS TAXES
I'M FACING FROM CANADA -
U.S.? I REGISTERED THE DEED ON THE PROPERTY
IN MY WIFE, MY SON, DAUGHTER, AND MYSELF'S
NAME; HOPING TO BE UNDER THE U.S. MAXIMUM
ALLOWABLE BEFORE THE CAPITAL GAINS TAX  KICKS IN. THE LOCAL REALTERS IN PALM
SPRINGS TELL ME THAT ALL THEY ARE REQUIRED TO DO, IS TO WITH-HOLD THREE
PERCENT FOR THE STATE. I WOULD APPRECIATE ANY ADVICE YOU
CAN GIVE ME. THANK YOU...
TAX.
====================================================
david ingram replies:
The four of you will have California, US Federal and Canadian Income Taxes
to pay.
The escrow agent is required to withhold 10% for the Federal government and
3% for the State of California.
All four of you then have to file the individual returns.  Failure to file
the US Federal returns has a penalty of $1,000 to $10,000 each even if you
lost money.  In this case, a profit of over $200,000 would likely generate
penalties in the higher region.
After calculating the tax payable to California and the US, the four of you
must convert the US dollars to Canadian and report the income again on
Schedule 3 of the Canadian Return.
Any net taxable income reported on line 127 must also be put on line 433.
The tax paid to the US and California gets claimed federally on line 431 and
provincially on form T2036.
I, of course, would be glad to prepare these for you when the time comes.
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