If the home was owned and your primary residence in 2 out of the 5 previous years then one qualifies for the 250,000 single/500,000 joint exclusion. Remember one can only have one primary residence at a time.
There is always the question of law vs provability. That they paid NYC taxes for the 2/5 of those years would be a good proof. I would argue that address on the return was for the convenience of reading mail while away from home.
Other issues regarding proving residency include: where you bank, where your prized poccessions are located, where you belong to organizations, where you vote, where you register your car, where you seek non-emergency medical care for you and yes... your pets, etc.
From your post, it seems that NYC was their primary residence until 2 years ago so they in fact are good for 3 out of the prior 5 years and can take the exclusion.
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Marvin Gruza CPA
Flushing NY
cpamarv@aol.com718 263 3025
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Original Message:
Sent: 07-11-2017 18:53
From: Michael Rubinstein
Subject: Two residences. Which can be claimed as primary?
A husband and wife own two residences, one in Manhattan, purchased about 7 years ago and one in Suffolk county, purchased about 30 years ago. While he worked in Manhattan they paid NYC income tax. They also spent most of their time in NYC. Two years ago he retired, stopped paying NYC tax, they bought a home in Florida and spent very little time in NYC. The Suffolk county address was listed on the tax returns. Question: they want to sell the Manhattan residence. Since they were paying NYC taxes for many years and spent most of their time there, can they claim the $500,000 exclusion? (I know that the IRS uses multiple factors.)
Thanks,
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Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
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