After 40 years in my Upper East Side apartment, I received a buyout this year from a firm that wants to develop the property. I was told this was a long-term capital gain. However, I moved to Florida earlier this year. Do I still have to pay New York State capital gains taxes on the buyout if I’ve been a Florida resident for more than half a year?
In a word: Yes. Moving out of state doesn’t exempt you from paying taxes of this kind, say our experts.
“Since this is based on a New York lease and you’re transferring the lease for consideration, you owe New York taxes regardless of whether you live here or in Florida,” says Medows CPA accountant Jonathan Medows. “Also, the contract was entered into while you were a New York resident.”
In other words, there’s no getting out of your tax bill on this one. (Indeed, if there were, presumably we’d see a lot of New Yorkers conveniently skipping town as soon as the ink dried on their buyouts.)
But look on the bright side: As we’ve written previously, a buyout taxed as capital gains (as opposed to regular income) will generally be taxed at a lower, more predictable rate, so all things considered, this is still a good deal on your end.
Virginia K. Smith is the senior editor at BrickUnderground.com, the online survival guide to finding a NYC apartment and living happily ever after. To see more expert answers or to ask a real estate question, click here.