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34moreImhittingthedoor
New Member

How to report NY rental property sale for Non-resident

I had a residence in NY, converted it to a rental and moved to NC. Have rented it in NY for 30 years and sold it in NY in 2016 (while I lived in NC).

Do I report that on a non-resident NY return or the NC resident return?

Also, being 30 years old and fully depreciated, what would be the best conservative way to come up with a basis for capital gains calculations. 

I don't have any of the old Form 4562 reports. 

Thanks so much in advance for your help. I appreciate everything you guys do.

1 Best answer

Accepted Solutions
DDollar
Level 7

How to report NY rental property sale for Non-resident

You will need to report it on both your North Carolina return AND on a New York Non-Resident return.  North Carolina will give you a credit for tax you have to pay to New York, so you won't be double taxed on the gain. 

For the basis of the property, since it was a rental for 30 years, the building would have a cost basis of zero, so the remaining cost basis would be the cost of the land.  And although the cost basis is zero, you will have to deal with depreciation recapture.  So you will need to determine what the original cost basis was, because that is your depreciation.  (Note:  The gain and depreciation recapture is calculated based on depreciation that could have been taken, not the actual depreciation taken.)

Finally, if you have not been filing and reporting rental income and expenses on a New York non-resident tax return since you left New York, you might want to consider contacting the New York Department of Taxation and Finance to discuss how to proceed.

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1 Reply
DDollar
Level 7

How to report NY rental property sale for Non-resident

You will need to report it on both your North Carolina return AND on a New York Non-Resident return.  North Carolina will give you a credit for tax you have to pay to New York, so you won't be double taxed on the gain. 

For the basis of the property, since it was a rental for 30 years, the building would have a cost basis of zero, so the remaining cost basis would be the cost of the land.  And although the cost basis is zero, you will have to deal with depreciation recapture.  So you will need to determine what the original cost basis was, because that is your depreciation.  (Note:  The gain and depreciation recapture is calculated based on depreciation that could have been taken, not the actual depreciation taken.)

Finally, if you have not been filing and reporting rental income and expenses on a New York non-resident tax return since you left New York, you might want to consider contacting the New York Department of Taxation and Finance to discuss how to proceed.

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