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Posted by A.G. Kalman on October 24, 2006, 7:08 am
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Stuart A. Bronstein wrote:
>> Stuart A. Bronstein wrote:
>>> As a result of his death, my friend and her two sisters
>>> inherited Dad's house, which was sold. Profit over
>>> (stepped-up) basis was $10,000. None of the sisters live in
>>> NY, and no NY income tax returns were filed.
>>>
>>> Now NY says that they want tax returns. Should they be
>>> filed?
>> Yes, of course, if the gain results in any tax liability to
>> New York. the property was located in New York, so the gain
>> is New York source income. When you divide the $10,000 gain
>> three ways, it may not be enough to create a tax liability
>> for any of the sisters. Nevertheless, an easy way to
>> dispose of the issue (since NY has picked up on it) is to go
>> ahead and file the returns.
> She found a statute that apparently says that a NY return is
> only required if there's more than $7500 of income. That's
> the reason I asked - each sister had under $3400 of taxable
> income.
>
> But I suppose they should file anyway.
This a good example of when one should file even though a
statute says it is not necessary. Upon the sale, NY was
informed (probably by a 1099-S) that real property located
in NY changed hands. NY only has the gross selling price.
Without the filing of a return, NY will continue to hound
the taxpayer(s). NY is not the only state that follows up
on unreported sales of capital assets.
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