Sadly, we have a lot of realtors in Colorado that think they are tax experts when selling a property. Colorado will assess penalty for not withholding and submitting taxes at time of sale if your client is a nonresident and transaction is taxable in Colorado. I'm betting the realtor didn't tell your client that little nugget. The Colorado capital gain exclusion is not something that most realtors are familiar with. Assessments for improvements are added to basis. HOA expenditures are not added to basis we follow must federal rules.