04 Feb Do I have to pay taxes twice on this home sale?

Q. I sold my shore vacation home in 2021 and realized a profit of about $200,000. I paid the exit tax prepay of 2% at closing. I am a resident of Wisconsin. I understand that I need to file a NJ non-resident return to determine my actual tax. Do I need to pay the capital gains tax on my New Jersey vacation home also in Wisconsin? I mean do I need to double pay?
— Seller

A. Congrats on the sale, but we’re sorry to see you go.

But don’t worry. You won’t be double-taxed on the home sale.

When you sell property in New Jersey, you need to file an income tax return and pay tax on the gain, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.

“On your Wisconsin tax return, you will need to report the same sale,” he said. “You can take a credit for taxes paid to New Jersey, which should offset the Wisconsin tax.”

Consider working with a tax preparer if you’re not sure about how to complete your returns properly.

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This story was originally published on Feb. 4, 2022.

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