13 Feb We’re moving to Florida. What happens with taxes on our N.J. home?

Q. My wife and I are expecting to move into a new home in Florida this year. We will make that our primary residence as soon as we move, but continue to own our home in New Jersey for at least a couple of years. Is there a deadline for selling our Jersey home if we want to be able to take advantage of any capital gains exclusion New Jersey has?
— Moving on

A. Congratulations on the move to Florida.

Keeping the Jersey home may be smart so that you can make sure the move is what you want.

But there are potential tax drawbacks, depending on your timing.

New Jersey follows the federal guidelines for the exclusion of gain on the sale of a principal residence, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.

“ It must have been your principal residence for two of the past five years,” he said.

Karu also offered a caution.

“If you rent it, it changes its character for tax purposes and you can lose the $250,000 per spouse exclusion,” he said.

We recommend you speak to a tax advisor so you can plan your move without losing this valuable tax benefit.

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This story was originally published on Feb. 13, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.