Taxes on home sold in Richmond County, NY

Don't know much about New York but let me try.

If you've moved to the new state permanently you are no longer a resident of NY. According to form IT-2663

you have to pay tax on the gain, which looks like a flat 8.97% of your gain. The gain is proceeds minus cost. Proceeds is sales price minus commissions minus transfer tax. Cost is what you paid plus additions minus energy tax credits. Suppose you have $10000 in gain, then you would pay $897. But when you file your New York non-resident tax return you would find that your tax is less because of the exemption, progressive tax brackets (normally the 8.97% tax brackets starts at over 200k of taxable income), and possibly credits. And since you've lived in the house for 9 years you can use section

121. You can exclude 250k of gain if single, and 500k if married. So if your profit was $10,000 then after the exemption your profit is zero. 250/500 is a pretty huge amount, so it's quite possible you would have no tax due. But if you were renting your house in that one year period then it gets a bit more complicated.

You may be thinking of New York's accrual rule for taxpayers who move out of New York during a taxable year. Any income that has accrued while an individual was a NY resident but that is not received by a cash basis taxpayer until after he has become a nonresident must be included in NY taxable income in the year of change of residence, unless the taxpayer posts a bond with the Department and agrees to be taxed on the income when it is received. 20 NYCRR Sec. 154.10,

154.11. However, the gain does not accrue until you sell the property; so unless the sale closed before you became a nonresident, there would be no need to include it in income or post a bond in the year you moved.

Also, New York conforms to IRC Sec. 121, which excludes up to $250,000 ($500,000 MFJ) of gain on the sale of a principal resident if the taxpayer has lived in it for at least two of the five years preceding the sale.

If the gain on the sale exceeds the Sec. 121 limit, you will have to file a nonresident return to report and pay tax on the excess, which will be taxed at the rate that applies to your income level, filing status, number of dependents, etc. There is no special rate for capital gains in New York.

Katie in San Diego

But IT-2663 suggests that you must pay a flat 8.97%.

Estimated tax due

18 Enter the gain from line 17 ( if only a portion of the gain from line 17 is subject to tax, see instructions below ) ...... 18. 19 New York State tax rate 8.97% ( . 0897 ) ......................................................................................................

1. .0897

20 Estimated tax due ( Multiply line 18 by line 19, and round to the nearest whole dollar; enter here and on the front page, Part 2, line 3. Complete Form IT-2663-V, Nonresident Real Property Estimated Income Tax Payment Voucher, on page 3. )

......................................................................................................

Instead of the typical withholding of tax by the purchaser on the sale of real property by a nonresident, New York requires the seller to make an estimated tax payment at the time the deed is recorded. This is just an estimated tax payment; it's not the actual liability, which is reported on a nonresident individual income tax return. The statute does require the estimated tax payment to be at the highest rate, and there doesn't seem to be any provision for a reduction if the actual tax liability is expected to be much lower. See the second paragraph of the instructions for Form 2663

This is how states balance their budgets-- accelerate collection of the tax and refund the excess later. In any event, if the entire gain qualifies for the IRC Sec. 121 exclusion, no estimated tax payment is required. If the gain exceeds the excludable amount, or part of the gain is not eligible for Sec.

121, the amount on Line 18 (on which the tax is calculated) would reflect only the taxable amount.

Katie in San Diego