As the founder and broker of Tverdov Housing, with over a decade specializing in New Brunswick's real estate—particularly multi-family and investment properties near Rutgers University—I've helped sellers manage tax implications on hundreds of closings. Reporting capital gains correctly avoids surprises, especially in our Rutgers-driven market where properties often appreciate significantly.
Capital gains from a home sale are handled similarly at federal and New Jersey levels, with New Jersey following federal calculations. If your New Brunswick home was your primary residence (owned and lived in for at least 2 of the last 5 years), you qualify for the federal exclusion: up to $250,000 (single) or $500,000 (married filing jointly) of gain tax-free. New Jersey honors this same exclusion—any amount excluded federally is excluded from NJ Gross Income Tax.
Federal Reporting:
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Calculate gain: Sale price minus adjusted basis (original cost + improvements - depreciation).
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If eligible for exclusion, report the sale on Form 8949 and Schedule D (Form 1040), applying the exclusion—often resulting in zero tax.
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You'll receive a Form 1099-S from the closing agent if the sale price exceeds $250,000.
New Jersey Reporting:
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Gains are taxed as ordinary income (no short/long-term distinction; rates up to 10.75%).
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Residents report on Form NJ-1040, Schedule B (Net Gains or Income from Disposition of Property). If fully excluded federally, enter zero or note the exclusion.
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At closing: Residents file GIT/REP-3 (Seller's Residency Certification/Exemption) to avoid estimated payment—tax settles with your annual return.
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Nonresidents: Estimated payment required at closing (higher of gain × 10.75% or 2% of price), unless exempted.
Most primary residence sellers in New Brunswick owe nothing if within exclusion limits. For investment properties or gains exceeding limits, consult a tax professional—document basis with improvement records.
At Tverdov Housing, we connect clients with experts for seamless tax prep alongside sales.
For Central Jersey insights, check The New Jersey Real Estate Investor podcast.
Selling soon? Contact Tverdov Housing—we'll guide you through reporting and maximize net proceeds.
