Author Topic: help on selling house and moving- tax questions  (Read 732 times)

Stache In Training

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help on selling house and moving- tax questions
« on: February 25, 2020, 11:32:17 PM »
My family and I are debating moving from Wyoming (meaning no state or city income tax) to Ithaca New York (meaning around 6% state income. doesn't look like there's a city tax there).  We'll be selling a house, and then looking to buy.  We'll about break even after selling, if you count up what we did to finish a room and add windows, plus our down payment.  (Isn't there something special I can do if we lose money?)

It looks like as long as we don't sell before the 2 year mark, then the profit will be tax free, under 500K (filing jointly). I just wanted to make sure I was understanding that correctly?

Also, it may behoove us to sell some index funds for affording the new house.  Is there anything that shelters some tax from selling stock if buying real estate?  Also, (this may need to go in the tax subsection of the forum) when does residency change, in terms of tax liability?  For instance, should I sell some while still a Wyoming resident?  Or the fact that the move/change would all be happening in the same year, mean that New York will say "they ended as our resident, therefore you need to pay the taxes here."? Or can I do it right before buying or renting, so I'm not officially a resident yet? I hope this makes sense.  There will be some time that we'll be homeless (travel and live with some family) between selling our house and finding a new one (either buy or rent), so it's not like we'd immediately become NY residents.

What else am I missing?

Thanks in advance!
« Last Edit: February 26, 2020, 09:11:59 PM by Stache In Training »

Stache In Training

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Re: help on selling house and moving- tax questions
« Reply #1 on: February 26, 2020, 09:12:39 PM »
Hmm, maybe I'm in the wrong category on the forum

Spitfire

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Re: help on selling house and moving- tax questions
« Reply #2 on: February 28, 2020, 07:53:35 AM »
You are correct about the 2 years, if you live in a principal residence for 2 out of the last 5 years you can get an exclusion on the gain (250k single/500k married joint).

There is nothing that I'm aware of that allows you to exclude capital gains from selling investments when buying a home.

States vary on the treatment of how they count income in/out of state, I am not familiar with how those states would treat the transaction. Without knowing, I would think your best bet is to sell in Wyoming since there is a chance it will be treated as income in that state (with no income tax). It is absolutely possible that New York will try to make you claim the income there or make you claim some of the income (based on how many days you lived in the state).

Good luck on the move!

Stache In Training

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Re: help on selling house and moving- tax questions
« Reply #3 on: February 29, 2020, 10:37:15 AM »
thanks you, spitfire!  my thoughts exactly