Darren Zagarola, CFP®, CPA/PFS, was recently featured in NJMoneyHelp answering a reader’s question about New Jersey’s so-called “exit tax” when selling a home and moving out of state.
In the article, Darren explains that the exit tax is not actually a separate tax. Rather, it is a prepayment of estimated tax that New Jersey may require at closing when someone sells property and leaves the state. He also discusses how capital gain on the sale of a home is calculated and how the federal primary residence exclusion may apply when a homeowner has lived in the home for at least two of the five years before the sale.
For many sellers, the rules can be confusing, especially when they do not expect to owe capital gains tax on the sale. Darren explains why a seller may still need to make the estimated payment at closing and how that amount is reconciled when filing a New Jersey income tax return.
If you’re thinking about selling your home and moving out of state, speak with a financial planner or tax advisor early in the process. Doing so will help avoid surprises later.
Read the full article on NJMoneyHelp: Will I have to pay the exit tax when I sell my home?
Learn more about Darren Zagarola and how he helps his clients navigate their journey to financial independence.
