Calling income tax gurus?

lia_b
Mon, 25 Apr 2016 18:10:43 +0000

I expect we can still file married jointly. Something interesting that I just caught in the link provided by Madison85 has to do with the treatment of the gain after sale of a home. It gets more complicated : (

“For example, a husband and wife purchased a home in New York for $150,000 in 1965 and established New York as their domicile. In 1985 the taxpayers purchased a home in Florida and changed their domicile. Although they now consider themselves nonresidents of New York, they retained the New York residence until 2004 when it was sold for $600,000. According to IRC Section 121, taxpayers can exclude the gain on the sale of a principal residence occurring on or after May 7, 1997 not exceeding $250,000 ($500,000 if married filing jointly). Since the taxpayers in the example indicated that they changed their domicile in 1985, the New York property ceased being their principal residence long before it was sold in 2004. The taxpayers would owe tax for federal and New York State purposes on the full $450,000 gain in the year of the sale”