I have a 2nd home, not rental or investment property, in SC held for more than 5 years. I live and file in NJ and am in 28% fed bracket. What deductions can I take against the gains on sale of property to reduce exposure to capital gains both federal and state. Do special assessments, not regular monthly assessments, that were used to reconstruct common areas such as porches and fronts of buildings qualify as deduction? Any other deductions qualify? Do the capital gains in state of NJ become part of ordinary income and thereby may place me in a higher state income tax bracket which would affect all of my income?
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Capital Gains on Second Home
- Thread starter tompass
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LdiJ
Senior Member
The special assessments would get added to your basis, therefore reducing your capital gain.
You need to consult with both a tax pro in NJ and a tax pro in SC. My guess is that the capital gain will be considered SC income rather than NJ income. However tax laws vary from state to state, so you need a local pro to answer those questions.
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