I just bought a new home about 40 miles away. It is likely to appreciate, while my old house won't; so I am eager to make it my primary residence for tax purposes. I will put the old house on the market in a couple weeks, but they aren't selling really fast, so I might own it for year.
What do I have to do make the new house my primary residence? NYS gives primary residences a lower tax rate, and the new house is much more expensive, so it is important for that reason also.
while my old house won't; so I am eager to make it my primary residence for tax purposes.
selling really fast, so I might own it for year.
expensive, so it is important for that reason also.
This seems more like a NYS tax question. Use you new address on your
2012 tax returns. IRS generally doesn't care where in the US you live unless you are dealing with certain federal homeowner credits you took on the old house or are looking to claim moving expenses (won't work).I don't know about the NYS tax issues, but someone likely will correct my post anyway.
I don't know about NY, but in general all you have to do is bona fide move into the new house. In your own records, keep records of when you did this, along with moving expenses (although they likely won't be deductible as you don't meet the distance test, but it gives an aura of formality to your records).
It might be good to consider renting the old house if you think prices will drop, because the loss the time you started the rental (be sure to get an appraisal), to the time you sell it (and proceeds will be reduced by the 5 or so % selling fees) will be deductible.
On 8/7/12 7:50 PM, Confused wrote: [snip]
Physically move into it. Use it as your main home. Stop using the other house as your main home.
Also, change your voter registration, driver's license, and auto registration(s) to the new address.
Ira Smilovitz
I don't think it will drop any, but it sure as heck won't go up. It is worth pretty much what I paid for it 20 years ago!
Renting it might be worth considering. The new house is entirely furnished, so we don't need anything from the old house. (though we might want to swap a few pieces...)
What is the 5% selling fee reduction? That would be a few dollars.
When you sell a house you pay a fee, usually 5% to 6%, of the house's price. This fee is usually paid by the seller from the money they receive when they sell the house, and usually half goes to the buyer's agent and half to the seller's agent. Anyway this fee is like a transaction cost when you sell a stock, and you subtract it from your proceeds. So say your house is worth
100k when it is available for rent, and you sell it for 100k, and the fee is 5%. You actually have a gain of (100-5)-100=-5, that is a loss of 5k that is deductible because this is a business expense.BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.