Last year, a woman sold her house in Connecticut in order to move into a condo in New York City.
The closing of the sale of the woman’s house was set to be before she moved out of Connecticut. Unfortunately, it was delayed until two weeks after she started living in New York.
Due to this postponement, the New York tax authorities declared that the gains ought to accrue to New York, where the woman resided at the time the sale actually closed. At this point, the woman had already paid Connecticut an amount of $577,000 as capital gains tax.
The state’s tax authority and the New York tax court both agreed on the ruling that the sale of the home was not considered complete for tax purposes until the final closing, since the sale was not closed before she moved to New York. The final closing, after all, occurred while she was residing in her condo.
The woman acquired a tax debt of $1.16 million for capital gains, interest, as well as a tax penalty from New York. She is currently appealing the ruling.
Are You Having Tax Trouble?
If you are experiencing tax troubles, immediately contact an experienced tax attorney such as William Winspear of Winspear Law Group, PLLC at (716) 803-8770.