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Exactly how much is the capital gains tax for real estate in New York?
Sent to Tax Experts August 08 08:23 PM

I bought a house in 2003 for $359,000. I'm selling it now for $499,000. I did refinance in the meantime for $440,000. What can they tax me on?

 

Optional Information:
Bronx, New York

Customer (name blocked for privacy)
Status:  Closed   Value: $15
Answer
August 8 8:32 PM (8 minutes and 35 seconds later)
         
REPLIEDCheck Mark

If you have lived and used the property as primary residence for 2 years during 5 years windows ending on the date of sale, you can exclude the capital gain up to $250,000 for single or MFS, $500,000 for married filing jointly.

You can exclude the gain only once every two years.

Capital gain calculaiton:

capital gain = selling price less selling expense less adjusted cost basis

adjust cost basis=purchasing expense plus purchasing price plus improvement less depreciaiton

The amount of gain that is more than the exclusion amount is taxed as long term capital gain rate which is 5% or 15%(5% up to 15% tax bracket).

Zhicheng Lai -- Enrolled Agent(EA) -- 98% Positive Feedback on 742 Tax Accepts
5 years tax preparing experience
Reply
August 8 8:42 PM (10 minutes and 23 seconds later)
         
Reply to Zhicheng Lai's Post: I did not live in the property for 2 years. It was rented out most of the time. I would still like to know if I do face the capital gain tax and if so, will they tax me 5% to 15% on the difference from the original purchase price and the selling price ($499,000-$359,000=$140,000) or wil they tax me on whats's left after I pay my note (which is higher than the original price since I refinanced) , commission, closinging taxes to sell the house?
Customer (name blocked for privacy)
Answer
August 8 8:53 PM (11 minutes and 10 seconds later)
         
ACCEPTEDCheck Mark

The capital gain has no relation with your notes.

The capital gain is calculate as:

499,000-359,000=$140,000

You can also deduct the closing cost, commission, you will need to add back the depreciation.

The depreciation will be taxed at 25% since this is a rental property.

The 140,000 less the closing cost and commission will be taxed at 15% max: 140,000*.15=$21,000max

State tax is extra.

The better approach is moving back, use the house as primary residence for 2 years, you can exclude the gain up to $250,000 for single, or $500,000 for MFJ.

Zhicheng Lai -- Enrolled Agent(EA) -- 98% Positive Feedback on 742 Tax Accepts
5 years tax preparing experience
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