Tax Implications of Selling Your House for Cash in the Northeast
A cash sale is not taxed differently than a financed sale — but the speed can catch sellers off guard at tax time. Here's a plain-English rundown of what to expect. Talk to a CPA before closing if the numbers are large.
Federal capital gains
Primary residence exemption: single filers exclude up to $250k of gain, married filing jointly up to $500k, if you lived there 2 of the last 5 years. Most Northeast sellers pay $0 federal on a primary home.
Investment properties don't get this exemption. Consider a 1031 exchange if you're rolling into another investment property.
State transfer taxes
Northeast states have real transfer taxes: Massachusetts about $4.56/$1000, Connecticut 0.75–2.25%, New York state 0.4% plus city taxes in NYC, New Jersey 1%+ on higher-value sales. Cash buyers typically cover all of these.
1099-S at closing
Title companies issue a 1099-S reporting the sale to the IRS. It arrives in January — do not miss it on your return even if the sale is tax-free.