The Listen to Lawrence Letter: Second Home Out-Of-State?

Interested in buying a second home out of state? Read on:

CLIENT QUESTION:

I have a second home in Florida valued at about $1,000,000. My total estate is hovering around the New York State estate tax exemption of about $7.35 million.  A friend of mine in Florida told me that I will not be taxed in New York on the value of my Florida home. Is that true?

MY RESPONSE:

Good news! Keep that friend. All real estate you own outside New York is not taxed in New York. It is taxed in the state where the property is, so check those exemptions. In your case, Florida has no estate tax, so you have no problem. The bottom line is that your taxable estate in New York is closer to $6.35 million, so you have no estate tax exposure at this time. If your New York taxable estate continues to grow, you may or may not have a problem in the future. Keep an eye on it.

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