Accountants, Financial Planning, and Tax Advice If You’re Buying or Selling A New York Condominium
If you’re thinking of buying or selling a condominium in New York, it’s wise to speak with your accountant or financial planner to help you plan for the tax issues involving your purchase or sale.
A lot of cash changes hands at a closing, and New York City and State play an active role in getting a piece of your money.
Capital Gains, Losses on the Sale of Your Home
If you meet the ownership and use tests, you will generally only need to report the sale of your home during the last year if your gain is more than $250,000. If you’re married and filing a joint return, the IRS says that you’ll generally need to report the gain if it’s $500,000 or more.
According to the IRS, this means that during the 5-year period ending on the date of the sale, you must have:
- Owned the home for at least 2 years (the ownership test), and
- Lived in the home as your main home for at least 2 years (the use test).
If you owned and lived in the property as your main home for less than 2 years, you may still be able to claim an exclusion in some cases. The maximum amount you can exclude will be reduced. If you are required or choose to report a gain, it is reported on Form 1040, Schedule D (PDF), Capital Gains and Losses .
If you were on qualified extended duty in the U.S. Armed Services (something that happens a lot these days) or the Foreign Service you may suspend the five-year test period for up to 10 years. You are on qualified extended duty when:
- At a duty station that is at least 50 miles from the residence sold, or
- When residing under orders in government housing, for more than 90 days or for an indefinite period.
Important: this information was obtained from the IRS, but should not be construed as professinal financial advice.