What Are the Tax Implications of Selling Your Port Washington Home?

What are the tax implications of selling your home in Port Washington?
When you sell a home, you may owe federal and state taxes on your profits — but not always. Depending on how long you’ve owned and lived in your home, you might qualify for significant exclusions or deductions that reduce or eliminate your tax bill.

1. Capital Gains Tax

Capital gains tax applies when you sell a property for more than you paid for it. The difference between your selling price and your adjusted cost basis (purchase price plus improvements and selling costs) determines your taxable gain.

Federal Capital Gains Exclusion

If the home was your primary residence for at least two of the last five years, you may exclude:

• Up to $250,000 of profit if filing individually.

• Up to $500,000 if married filing jointly.

Example

If you bought your Port Washington home for $700,000 and sell it for $1,100,000, your gain is $400,000. If you’re married and meet the primary residence rule, that gain is fully excluded from federal tax.

If the home was an investment property or you didn’t meet the time requirement, you may owe capital gains tax on the profit.

2. New York State Taxes

New York also taxes capital gains as part of your state income tax. The rate depends on your income bracket, typically ranging from 5% to 10.9%.

Additionally, sellers pay a transfer tax of $4 per $1,000 of the sale price (0.4%). For example, selling a home for $1,000,000 means a $4,000 state transfer tax, generally deducted at closing.

If your home sells for $1 million or more, buyers typically pay a 1% mansion tax, but this can influence negotiations.

3. Deductible Selling Costs

You can reduce your taxable gain by deducting:

• Real estate commission fees.

• Legal fees, title insurance, and recording fees.

• Home improvements (new roof, kitchen remodel, HVAC replacement, etc.).

• Marketing or staging expenses used to sell your home.

Keep receipts for all improvements and closing costs — they can significantly lower your taxable amount.

4. Special Circumstances

• Inherited Homes: You receive a “step-up” in basis to the home’s market value at the time of inheritance, which usually minimizes capital gains tax.

• Divorce or Joint Ownership: Each owner’s share of profit and exclusions may differ; consult your CPA or attorney.

• Rental Properties: If the home was used as a rental, depreciation recapture rules may apply, meaning some tax benefits from prior years must be repaid.

5. How Eric Berman Helps Port Washington Sellers

Eric Berman, REALTOR, helps homeowners understand the financial side of selling by:

• Estimating net proceeds after taxes and fees.

• Connecting clients with local CPAs familiar with New York tax law.

• Advising on improvements and deductions that maximize your take-home profit.

Bottom Line

Selling your Port Washington home can come with tax obligations — but proper planning can minimize or even eliminate them. Knowing the rules around exclusions, deductions, and local taxes helps you make smarter financial decisions.

Thinking about selling your Port Washington home? Contact Eric Berman for a personalized estimate of your proceeds and connections to trusted tax professionals.

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What are the tax implications of selling your Port Washington home? Learn how capital gains, transfer tax, and deductions affect your profits with insights from REALTOR Eric Berman.