Many long‑time homeowners worry about taxes or how to leave their property to their children. Fortunately, U.S. tax law offers significant relief, and proper planning can ease the transition.
The capital‑gains exclusion
When you sell your primary residence, you can exclude up to $250,000 of capital gains from your income (or $500,000 if married filing jointly) (Source: IRS.gov)
To qualify, you must have owned and used the home as your principal residence for at least two of the five years before the sale.
If you meet these tests, profits below the exclusion amount are not taxed at the federal level—important for Suffolk County homeowners whose properties have appreciated dramatically.
Timing matters
You can claim the exclusion only once every two years. If you’ve taken the exclusion recently, consult a tax professional before selling another property.
State considerations
New York has additional transfer taxes and property‑tax implications. Seniors may qualify for property‑tax exemptions (such as the Enhanced STAR program), which could be lost upon selling. An experienced local agent and tax advisor can help you weigh these factors.
Inheritance and legacy planning
Many boomers intend to leave their home to heirs rather than sell.
Here are options:
- Transfer via will or trust: Placing your home in a living trust can avoid probate and provide clearer instructions.
- Life estate: You retain the right to live in the home until passing, at which point ownership transfers automatically.
- Sell and gift proceeds: Selling now, taking advantage of the capital‑gains exclusion and gifting the proceeds or purchasing a new property jointly with children.
Because every situation is unique, I recommend meeting with an estate attorney and CPA. I can connect you with trusted professionals and provide a complimentary market analysis to help determine the best path forward.
Shaughnessy Dusling
Licensed Associate Broker
Real Broker NY LLC
150 Motor Parkway St 401, Hauppague NY 11788
cell 631.612.1616
shaughnessysells(at)gmail(dotted)com