By Jimmy Lopez | Owner, Pupilo Tax
Selling a home in Yonkers is stressful enough with the closing costs and the moving trucks. But the real headache often comes months later, during tax season.
Many sellers assume that because they paid the "Yonkers Transfer Tax" (1.5%) at the closing table, they are done with taxes. They are wrong.
The IRS and New York State want their share of your profit (Capital Gains). If you sold a house in 2024, you need to report it now. The good news? In my 35 years of tax preparation, I’ve seen that most people pay too much simply because they don't know how to calculate their "Basis."
Here is how to stop the IRS from taking more than their fair share.
1. The $250,000 / $500,000 Exclusion Rule
This is your first line of defense.
- If you are single, the first $250,000 of profit is tax-free.
- If you are married filing jointly, the first $500,000 is tax-free.
- The Catch: You must have lived in the house as your primary residence for 2 of the last 5 years. If you moved out early and rented it, you might lose this massive break.
2. The "Adjusted Basis" Secret (Where We Save You Money)
Your profit isn't just Selling Price - Purchase Price. That calculation is too simple and costs you money. We need to calculate your Adjusted Basis. Did you:
- Replace the roof in 2010?
- Remodel the kitchen in 2015?
- Add a new boiler or HVAC system?
- Pay legal fees when you bought the house?
Every dollar you spent on "improvements" (not repairs) raises your basis and lowers your taxable profit. I help my clients dig through 20 years of history to find these deductions.
3. The Yonkers Transfer Tax Trap
Yonkers charges a 1.5% Transfer Tax on the sale price.
- Important: This is a selling expense. We can use this amount to reduce your capital gains tax on your federal return. Don't forget to bring your closing statement (HUD-1 or Closing Disclosure) to your tax appointment.
Did You Receive a 1099-S Form?
If you received a Form 1099-S at closing, the IRS already knows you sold the house. If you don't report it on your tax return, or if the numbers don't match, you will get an audit letter.
Don't Guess with High Stakes, You only sell a house a few times in your life. Do it right. Bring your closing documents to Pupilo Tax at 206 S Broadway. I’ll make sure you keep as much of your profit as legally possible.