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Eriberry
LIF Infant
Member since 5/06 99 total posts
Name:
Erica
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capital gain tax
We're looking to sell our co-op and put all of the profit into a downpayment for a house. In October, we will have been there for 2 years. I've heard you need to be in residency for 2 years or else you'll get taxed? So if we sell, as long as we close after October we would be fine? I'm so confused.
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Posted 8/18/08 11:33 AM  |
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annabegins
LIF Infant
Member since 2/08 59 total posts
Name:
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Re: capital gain tax
Pretty sure it has to be your primary residence for 2 years. So if you sell your co-op and it was not your primary residence for two years you will have to pay taxes on the gain. (Owning it for two years isn't what matters, it's that it was your primary residence. For example, you can't have a vacation home for two years, sell it for a gain, and be exempt from the tax).
I'm sure the tax experts on here can help more (I'm a CPA, but dont do taxes).
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| Posted 8/18/08 11:40 AM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: capital gain tax
I think you are refering to the "flip tax" that NYC has
I think you need to live there for 2 years to aviod it
But I am not 100% sure
as for capital gains- I think you just need to use the money to buy another house to avoid it
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| Posted 8/18/08 11:48 AM |
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Eriberry
LIF Infant
Member since 5/06 99 total posts
Name:
Erica
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Re: capital gain tax
thanks for the info. it is our primary residence. We just put it on the market, but now i'm nervous if we sell it before October that we'll be taxed. Anyone else have any info they can share with me?
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| Posted 8/18/08 11:48 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: capital gain tax
Posted by Eriberry
thanks for the info. it is our primary residence. We just put it on the market, but now i'm nervous if we sell it before October that we'll be taxed. Anyone else have any info they can share with me?
As long as you selling closing date is two years after your buying closing date, you won't get taxed.
But even if you sell a month before your two years, you are only taxed pro-rated for one month of gains. So if you had 10k in capital gains, you are only taxed 1/24th on that (1 month out of 24 months). So you are taxed on about $400 dollars worth of your $10000 gain. Which in real money is about $60 dollars of actual tax you pay.
So realistically it isn't as much as people think if you sell right before your two years is up. If you have a buyer, sell it.
Also check to make sure your co-op doesn't have a flip tax, which is simply a selling tax. Some co-ops charge a separate "fee" when you sell your co-op.
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| Posted 8/18/08 12:00 PM |
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leese
Sarge!
Member since 5/05 1965 total posts
Name:
Leese
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Re: capital gain tax
We did this last year and it was fine. Chances are if you just put it on the market, you won't be closed by October.
Our tax guy told us to go to closing 2 years and 3 days after the sale was recorded (you have to look that up) and you would be fine.
We did that, and then the sale was recorded a week later (I'm in NJ, not sure about NY).
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| Posted 8/18/08 12:02 PM |
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Eriberry
LIF Infant
Member since 5/06 99 total posts
Name:
Erica
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Re: capital gain tax
thanks everyone!!! such nice people that are so helpful :)
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| Posted 8/18/08 12:06 PM |
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