Brooklyn, NY asked in Tax Law and Real Estate Law for New York

Q: What are the tax strategies for selling a condo that I am currently renting out?

Hi, this is a "should I sell now or later" question. I have a 3-bedroom condo in Brooklyn, bought for $575k in 2007 and appraised two years ago for $850k (probably could get at least $900k right now). I am currently renting the condo (I moved out in 2009).

If I sell now, how much capital gains tax would I pay considering that I haven't lived there for two of the last five years? I heard that I must use the profits to purchase another property if I want to reduce my taxes owed. If I do that, does it have to be a primary residence or investment, or does it matter?

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1 Lawyer Answer
Michael David Siegel
Michael David Siegel
Answered
  • New York, NY
  • Licensed in New York

A: You are talking about a 1031 exchange, which is an option for an investment property. A primary residence comes with an allowed lifetime non-taxable gain. You have to determine your real gain, when you take into account expenses you have paid.

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