Taxes When Selling Real Estate

Due to the complexity of real estate tax consequences, it is strongly recommended that you consult with a qualified tax professional before selling.

I want to highlight a few important tax related considerations to keep in mind when selling Real Estate

If this is your Primary Residence

If you’ve used the property as your primary residence for at least 2 of the 5 years leading up to the sale you qualify for a capital gains exclusion of $250,000 for single filers and up to $500,000 for married or joint filers. In addition, you could deduct any home improvements and associated transactional costs incurred on the purchase and sale.

If this is an Investment Property

When you sell an investment property, you will likely be subject to capital gains tax on the profit (capital gain) from the sale. Capital gains tax rates can vary depending on how long you held the property (short-term or long-term) and your overall income. A 1031 exchange allows you to defer capital gains when you plan to reinvest.

State or Local Taxes (Transfer Taxes)

In Long Island

– All you pay is the NY State Transfer tax of .4% of the sale price

In all of NYC

– You pay the NY State Transfer tax of .4% of the sale price

– In addition, you pay the NYC transfer tax of 1% if the property is less than $500,000 and 1.425% if the property is over $500,000

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the most of your sale.