Sold Aulani, Need help with the Hawai'i tax system for refund

[Cruising Engineer]

We sold our Aulani DVC in September 2022. The escrow paperwork includes a Transferor/Seller's Hawaii income tax withheld of $783.00. To get our money back, there seem to be several forms required, including filing Hawai'i state income. Any experience dealing with the forms and income tax filing?

 

[maxbuffmelvin]

You must report the sale on your 2023 federal, home state, and Hawaii income tax return. You will file a 2023 nonresident Hawaii income tax return and your 2023 federal and home state tax return. If you sold Aulani DVC at a loss, the withholding will be refunded.

 

[jkips]

I recently sold an Aulani contract and just went through the process of getting what I was owed back. I filed a form N-288C with the state of Hawaii and after about a 2 month wait just received the check. Once I had the closing documents for both the initial purchase and sale in front of me the form was straight forward and surprisingly easy to fill out.

In your case, since your sale was in 2022, starting with a separate state tax return for Hawaii might make the most sense. If you realized a gain on your sale you are going to have to file a Hawaii tax return anyway.

 

[Cruising Engineer]

I recently sold an Aulani contract and just went through the process of getting what I was owed back. I filed a form N-288C with the state of Hawaii and after about a 2 month wait just received the check. Once I had the closing documents for both the initial purchase and sale in front of me the form was straight forward and surprisingly easy to fill out.

In your case, since your sale was in 2022, starting with a separate state tax return for Hawaii might make the most sense. If you realized a gain on your sale you are going to have to file a Hawaii tax return anyway.

You must report the sale on your 2023 federal, home state, and Hawaii income tax return. You will file a 2023 nonresident Hawaii income tax return and your 2023 federal and home state tax return. If you sold Aulani DVC at a loss, the withholding will be refunded.

Thank you @maxbuffmelvin and @jkips. Federal and my home state taxes were all completed with no problem. It's Hawai'i requirements I'm having difficulty with. Do I need to file both Hawai'i income taxes and the N-288C or just the N-288C? The N-288C is very straight forward and the $783.00 refund is very clear. But trying to do the full Hawai'i tax form I'm losing just about all of it. The original purchase and the sale were a loss of $3.00.

 

[jkips]

Thank you @maxbuffmelvin and @jkips. Federal and my home state taxes were all completed with no problem. It's Hawai'i requirements I'm having difficulty with. Do I need to file both Hawai'i income taxes and the N-288C or just the N-288C? The N-288C is very straight forward and the $783.00 refund is very clear. But trying to do the full Hawai'i tax form I'm losing just about all of it. The original purchase and the sale were a loss of $3.00.

I just went back and looked at the form. Given this sale was in 2022 you are going to have to file the state tax return. The N-288C will no longer be honored. This is from the N-288C:

“Form N-288C should be filed if the Hawaii income tax return (Form N-15, N-20, N-30, N-35, or N-40) for the year is not yet available. If available, the transferor/seller should file the appropriate tax return instead of filing Form N-288C. However, if the transferor/ seller’s tax year has not ended, the transferor/seller may file Form N-288C. Also, Form N-288C will be rejected if it is filed after the due date of the tax return.”

 

[maxbuffmelvin]

I'm sorry; I thought you sold Aulani in 2023 instead 2022. I would've only done the N-288C if you were trying to get the refund back in 2022. Don't bother with the N-288C in 2023. File the non-resident HI income tax return to get the refund back. You shouldn't have an HI income tax if you have no-HI source income outside of the Aulani loss; it's 100% refunded.

 

[Cruising Engineer]

Thank you, @jkips and @maxbuffmelvin . I'll look for the correct non-res form. I must have downloaded the wrong form because it was extremely detailed and long.