Question

Don't ever pay New York state taxes on out-of-state home sale?

Forum|Forum|4 years ago
May 2, 2022
1 reply
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I'm finding the NY state residency rules a little tricky, and would like to check that I'm reading this correctly...

We're selling our house in WA, then travelling to upstate NY to live in an Airbnb for a few months until we find and purchase a house in upstate NY. So, we will be first year NYS residents starting later this year (no earlier than July 24). We won't have any NY-based wage income until mid-August at the earliest.

Is this true?

1. We are a NYS nonresident until we purchase and move into a new house in NY? Airbnb doesn't count as domicile/residency - in fact, I don't even enter the Airbnb date on IT-203?

2. If our house sale in WA closes before the first day we live in our new NY house (our new "domicile"), we don't owe any NY state taxes on the house sale.

3. Also true? if our house sale in WA closes *after* we get our new house in NY, we *still* do not owe NY state taxes on it?

Thanks!

S

SundayInSalem

Yes. You will not become New York residents until you have a “permanent place of abode” in New York. The state says: “Your New York domicile does not change until you can demonstrate that you have abandoned your New York domicile and established a new domicile outside New York State.” (You can read that backwards for an incoming resident.)

Enter the starting date of your residency as the date you move into your new home.

Income tax definitions

You will not owe any NY tax on sale of your Washington home if you are not NY residents at that time of sale.

If your home sales closes after you establish NY residency, any profit would be taxed by NY. New York residents are taxed on income from everywhere.

New York follows federal law in excluding up to $250,000 of gain from the sale of a main residence, or up to $500,000 if you file a joint return with your spouse, if you own and occupy the home for two of five years.

Topic No. 701 Sale of Your Home