Will I have to pay exit tax when I sell my NJ home?
. My question is, how much exit tax will I have to give in New Jersey when I close my house. I am moving to Florida. I will not have a taxable gain. I bought the house for $ 125,000 and am selling it for $ 300,000. I meet the conditions to exclude a gain of $ 250,000. So do I have to pay the exit tax money to the state and wait to get it back when I file my 2021 return? Or is there a way to avoid having to pay money?
A. Congratulations on selling your home for a profit.
Based on the information you provided, you will not be subject to the so-called exit tax.
The exit tax is not actually a separate tax, but a tax payment estimated to cover the income tax resulting from the gain on the sale of real estate in New Jersey, said Bernie Kiely , Chartered Financial Planner and Chartered Accountant at Kiely Capital Management. in Morristown.
When you sell a home in New Jersey, you have to pay tax on taxable income, he said. This is the case, whether it is your primary residence, your secondary residence or your investment. It also applies to residents, non-residents or future former residents.
âIncome tax applies to the taxable gain on the sale of the house,â he said. âIn your case, there will be no taxable gain because the house was your primary residence.
At closing, your attorney will prepare a New Jersey State Vendor Residency Certification / Exemption Form (Form GIT / REP-3), Kiely said.
Your lawyer will check box 2 which indicates:
âThe property sold or transferred is used exclusively as a principal residence within the meaning of section 12 of the United States Code 26. Since your house has been your principal residence for at least 24 months during the previous 60 months, it does not there will be no taxable gain or estimated tax. payment will be required, âKiely said.
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Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘s weekly electronic newsletter.