Taxes on coop profit? (fit in, real estate, apartment)

[eddiep83]

From what I understand if you sell a primary residence that you have lived in for 2 years, you don't pay taxes on the profit? Is this correct?

https://realestate.findlaw.com/selli...exemption.html

[NYer23]

Originally Posted by eddiep83

From what I understand if you sell a primary residence that you have lived in for 2 years, you don't pay taxes on the profit? Is this correct?

https://realestate.findlaw.com/selli...exemption.html

Yeah, what about it? It pretty rare to turn such a huge profit in a short amount of time unless you are pushing rent stabilized/rent control tenants out of their apartment. Most people use the exception for when they are upgrading/downgrading properties as down payment for the next one. Transaction cost in real estate is very high, usually it takes several years to even break even.

[eddiep83]

Originally Posted by NYer23

Yeah, what about it? It pretty rare to turn such a huge profit in a short amount of time unless you are pushing rent stabilized/rent control tenants out of their apartment. Most people use the exception for when they are upgrading/downgrading properties as down payment for the next one. Transaction cost in real estate is very high, usually it takes several years to even break even.

just wanted to confirm. I had heard conflicting things. I purchased a coop 5 years ago that has almost doubled in value so it is indeed significant. i know there are some very knowledgeable RE posters here.

[NYer23]

Originally Posted by eddiep83

just wanted to confirm. I had heard conflicting things. I purchased a coop 5 years ago that has almost doubled in value so it is indeed significant. i know there are some very knowledgeable RE posters here.

You can confirm via the IRS website. IRS is fairly transparent in terms of the rules, especially given how commonly it is used. Just keep in mind potential coop has a flip tax, mortgage tends to be interest first before principal, real estate agent commission, NYC and NYS real estate property transfer tax, etc...

It is best to speak with your accountant on calculating your cost basis prior to listing profits on sale.

[bluedog2]

Originally Posted by eddiep83

just wanted to confirm. I had heard conflicting things. I purchased a coop 5 years ago that has almost doubled in value so it is indeed significant. i know there are some very knowledgeable RE posters here.

If your profit is more than 250,000 if you are single or more than 500,000 if married you would be liable for tax on the excess.

[eddiep83]

Originally Posted by NYer23

You can confirm via the IRS website. IRS is fairly transparent in terms of the rules, especially given how commonly it is used. Just keep in mind potential coop has a flip tax, mortgage tends to be interest first before principal, real estate agent commission, NYC and NYS real property transfer tax, etc...

It is best to speak with your accountant on calculating your cost basis prior to listing profits on sale.

yes i understand all of that, just wanted to confirm that 1 law I mentioned.

[BBMW]

There is a limit to the exemption. It's $250K for singles, $500K for married couples.

Edit: Three of us posted this simultaneously?

[mathjak107]

Originally Posted by eddiep83

From what I understand if you sell a primary residence that you have lived in for 2 years, you don't pay taxes on the profit? Is this correct?

https://realestate.findlaw.com/selli...exemption.html

this would be true up to the 250k for a single and 500k limit if married , providing that the apartment was not a rental or 2nd home prior to you living in it for those 2 years .

many people own other property and then make it a primary down the road and in that case the rules are different .