Do You Have to Pay Capital Gains Tax When Selling Your Home in Port Washington?

Do you have to pay capital gains tax when selling your Port Washington home?
Maybe—but not always. It depends on how long you’ve owned the home, how much it’s appreciated, and whether you qualify for certain exclusions. Eric Berman, REALTOR, helps homeowners navigate these questions so you can plan ahead and avoid costly surprises.

What Is Capital Gains Tax?

Capital gains tax is a federal tax on the profit you make when you sell an asset—like your house. The amount you owe depends on how much gain you made and how long you owned the home.

When Do You Owe Capital Gains Tax on a Home Sale?

You may owe capital gains tax if:

• You made more than $250,000 in profit (or $500,000 if married filing jointly)

• The home wasn’t your primary residence

• You owned it for less than 2 years

• You didn’t live in it for at least 2 of the last 5 years before the sale

Example:
If you bought your Port Washington home 5 years ago for $700,000 and sell it for $1.3M, your gain is $600,000. If you’re married and meet the residency requirements, $500,000 of that is excluded—but the remaining $100,000 may be taxable.

How Much Is the Capital Gains Tax?

It depends on your tax bracket and how long you’ve owned the home:

• Short-term gains (owned less than 1 year): taxed as ordinary income

• Long-term gains (owned more than 1 year): typically 0%, 15%, or 20% depending on income

Most Port Washington home sellers fall into the 15% bracket for long-term gains.

Ways to Reduce or Eliminate Capital Gains Tax

1. Live in the Home for 2 of the Last 5 Years
   This helps you qualify for the $250K/$500K exclusion

2. Keep Records of Improvements
   Major renovations (roof, kitchen, bathroom, additions) can increase your cost basis and reduce your taxable gain

3. Use a 1031 Exchange (for investment properties)
   Allows you to defer taxes by reinvesting in another property

4. Sell During a Lower-Income Year
   This may reduce the rate you pay on long-term gains

What About Inherited Homes?

If you inherited a home in Port Washington, your cost basis resets to the home’s value on the date of inheritance. This often eliminates most gains if you sell shortly afterward.

Local Tip: Watch Out for NY State and NYC Taxes

In addition to federal tax, New York State—and NYC, if applicable—may also tax capital gains. Eric can connect you with local tax professionals to ensure you’re prepared.

Final Thoughts

Capital gains tax doesn’t have to be a surprise. With the right guidance and planning, many Port Washington homeowners pay little or nothing at all.

Eric Berman, REALTOR, partners with local tax advisors to help you understand what you may owe—and how to reduce it. If you’re planning to sell, let’s strategize in advance to help you keep more of your profit.

Thinking of selling your Port Washington home?
Contact Eric Berman today for a personalized home sale and tax strategy consultation.

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Worried about capital gains tax when selling your Port Washington home? Learn what you might owe, how to qualify for exclusions, and how REALTOR Eric Berman can help you plan smart.