NY State Capital Gains

2 Replies

We are selling our primary residence in NY state (not NYC) and I'm a little confused on how capital gains will be handled at the state level. Thy his has been our primary home since we purchased it 2.5 years ago. I'm expecting to profit around $160k on the sale. I understand the federal rules and understand my tax liability should be zero. I'm under the belief that the same would be true at the state level, but my neighbor got into my head stating it is taxed as long term cap gain in NY. I was wondering if anyone could tell me for sure. I emailed my CPA but he is out of the country until later this week so I'm not expecting a quick response from him. Thanks in advance.

@Robert McDowell

The starting point for NY Taxable income starts with Federal taxable income.
New York then requires "additions" and "subtractions" to the federal taxable income based on the difference in Federal/New York Tax law differences.

Form number IT-225 lists all the additions/subtractions there are for New York State.
The section 121 exclusion is not an addback for NY Purposes.