I sold a condo that was used as a winter home only for about 2 months a year. I purchased it in 1974. A gain of $65,000 was realized. What are my tax obligations?

ANSWER

The BIDaWIZ Team's Answer:

Did you rent this home at all during the year or was it strictly used for personal use? If you did rent it, how many days did you do so? Assuming that the condo was only used for personal purposes, you would report the gain on Schedule D of your Form 1040. Please note that the sale will be treated as a long term capital gain and the tax rate will depend largely on your ordinary income tax bracket. Specifically, if your earnings are in the 15% ordinary income tax bracket or lower, then you aren't subject to any federal capital gains tax. However, if your income exceeds the 15% ordinary income tax bracket, but is $400,000 or less and you're single or $450,000 and you file jointly, then your federal capital gains tax rate is 15%. If your income is more than $400,000 and you're single or more than $450,000 and you file as married filing jointly, your federal capital gains tax rate is 20%. The other point to note is that you could be subject to a New York state tax as high as 8.82%. This will also depend on your income.