Legal Question in Real Estate Law in New Jersey

Re: Tax impications of selling a house in NJ

Presuming the house was your marital residence for 3 of the past 5 years, the profit, while income, should be exempt from tax, as you may exclude the first $250,000 of profit from taxable income. If you owned the house less than 5 years, there may still be an exclusion, but using a different formula. The reporting of the gain (even if not taxable) occurs for the year in which the house is sold. However, there are other rules applicable if the first exemption does not apply, which allows you to elect to defer the gain (if taxable) if a replacement house is purchased within 18 months of the sale and its cost is at least equal to your share of the selling price. Some additional information is needed to provide you with an exact reply. When did you buy the house? How long did you reside in it? Was it exclusively used as the marital residence (no business conducted in it for which you claimed or could have claimed a depreciation deduction)? I suggest you contact an accountant to assist you or contact me directly with the answers to these questions.