Posted by DK on March 08, 1999 at 15:48:30:
In Reply to: Housing Court deals posted by Jean F on March 04, 1999 at 00:03:02:
The Internal Revenue Service says that buy-out payments like the one you describe are taxable gains. That means the 20% maximum rate on long term capital gains applies if you have lived in the apartment for at least a year. Don't forget to add state and city taxes also to figure out how much will be left after the government takes its share.
Some argue that leasehold buyouts fall within the exclusion of gain for the sale of a residence. So far IRS does not agree, but at least one tenant has successfully the point in the small claims division of the Tax Court.
: I'm a NYC rent stabalized tenant and just had my first day in Housing Court yesterday. The landlord's lawyer offered to forget the 3 months rent and pay me extra, like a couple of thousand, to move out soon. I lost my job, I can live with my brother for awhile. Is any of this money, the rent part or the extra part, taxable? If I can get them up to say $4000 and I can keep all of it, then its $4000. If theres tax, its only $3000, isn't it?
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