In New York, how can a widow minimize capital gains tax on the sale of her primary residence? Would her tax bracket and exemptions matter?
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Anonymous
ANSWERS: 1
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Some states do definitely take a bigger tax bite than others. Any capital gains taxed as ordinary income would have a bearing on your tax bracket and exemptions you qualify for. Something to consider, depending on your age, income needs and amount of appreciation on your primary residence is a Private Annuity Trust. Have the trust created, put the residence in the trust, have the trust sell the residence and exchange the proceeds for a lifetime income. This does not avoid the payment of capital gains tax, but it does spread it out over the rest of your life, and keeps many of the gains working for you for years to come. It can also give you a nice income stream that you can depend on to live.
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