paying capital gains tax at closing

I don't believe you need to pay this at closing, unless this has changed recently. You pay whenever you pay your income tax.

I think there is some requirement for non residents to bring some sort of form to the closing. Relatively new requirement.

I recently heard something about this but do not know the particulars.

Just have your lawyer strike the Capital Gains Payment at closing paragraph from the sales contract. That way you can pay at year end within your income tax form instead.

Actually there is a requirement for non-residents- you need to file Form IT-2663 and estimate the amount of capital gains tax due the state. I think the estimation might be paid to the closing agent who then forwards it to the state. Not sure about this point.

If #6 is correct and you do have to pay at closing, then the key to avoiding making a cash payment is to very precisely calculate and document your capitalized base cost which includes the price you paid, capital improvements you made (inclusing in your share of co-op/ condo maintenance fees), the brokerage commission, and lots of other legitimate, legal costs. Do a search on capitalized base cost of home on the IRS or another web site. Once you are done, you should be able to show no capital gain. Also you get a $250,000 exclusion ($500,000 for married couples), and even beyonf that you can roll any excess gains into another real estate purchase (1031 exchange). Don't be an idot -- do not pay the government capital gains tax.