Sell then Move out of NYC or Move then Sell?

"What I am concerned about are "Gains Tax Withholding." What is the current percentage and who qualifies as "an out of state seller"?"

Consult an accountant. I wouldn't make a decision based on internet answers for legal/tax questions.

"...we could always insert a clause into the contract, which states that we will not move until X date, thus preventing us from having to rent"

Yes, better than the alternative.

Sorry about being so brief, but your situation is straight forward after you consult a tax professional.

Good Luck

Are primary residences subject to capital gains tax? I had thought not but am NOT an accountant.

> we could always insert a clause into the contract, which states that we will not move until X date,

A good seller won't make a transaction difficult for a buyer. I don't mean this morally, rather from the POV of being able to have the widest universe of interested buyers.

You should consult an accountant, but my understanding is that you can move first as long as you have lived there two of the past five years, and still qualify for the exemption, up to $250K in gains for an individual or $500K for a couple. It may still be that if you roll the proceeds into a new home and it all falls within the 5 year window, then you are good for unlimited gains, but I'm not 100% sure whether that piece changed when they changed the rules.

If you have gains, you're going to have to pay them, whether you live in New York or not - its more a matter of when you pay them - if you are residing outside of NY at the time of the closing, then 8.82% of the net total gain is paid at the Closing, and then after that, you pass along all the info to your accountant, so when he does your return, they are acccounted for.

@MidTownWGeek You are no longer allowed to roll over tax-free proceeds into a new home. The IRS personally informed me of the rule change when I sold a condominium during the aught decade.

@FutureFormerNYer As others have stated, you need to speak with an accountant. But note that if you have a taxable gain on your home, the IRS will be looking for the related taxes to be paid at the time of sale. Don't want until April 15th to pay taxes on the sale. A married heterosexual couple is allowed to exclude up to $500,000 of gains from the sale of their home. See the link below for IRS Publication 523 and the IRS summary that follows.

http://www.irs.gov/publications/p523/ar02.html#en_US_2012_publink1000200623

"If you have any taxable gain from the sale of your home, you may have to increase your withholding or make estimated tax payments. See Publication 505, Tax Withholding and Estimated Tax.

Maximum Exclusion
You can exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true.

You meet the ownership test.

You meet the use test.

During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home.

For details on gain allocated to periods of nonqualified use, see Nonqualified Use , later.

If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions just listed.

You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons ."

Correction: If you have a taxable gain, the IRS will expect taxes to be paid by the quarter end of the sales date. For example, I had a sale in May, the IRS expected taxes related to my gain to be paid by June 15th.

wavedeva.. curious how did IRS know you had a sale - I assume you listed it on your 4797 and into Sch D form?

properties are not like stocks where there is a 1099-B form telling IRS you sold, so how did they know you sold (aside from you telling them) since they dont see HUD's let alone dates on HUDS?? thanks

@ss400k
It was so long ago, I can't remember the details. Perhaps my real estate lawyer filled out a form--the sale did not take place in NYS. I do remember the IRS was quite reasonable and didn't hit me with extremely heavy penalties and interest. What a lot of people don't realize is that the U.S. tax system operates under a "pay as you go" system. If you have income that is not subject to withholding, you have to pay estimated taxes on that income. Otherwise you will be subject to interest and penalties.

I sold my home in 2012 and got a 1099-s from the title company.