We recently sold a rental property in NJ (2009). We are not Jersey residents. I would like to know the capital gains tax rate -- our accountant calculated ours to be over 78%. I also read someplace that the rate is calculated differently for over age 70 which we are. All of the info I read on capital gains in Jersey had a limit of about 8%. Can you clarify this for me. Thank you.

Fran Sweeney

NJ taxes capital gains the same as ordinary income, which depending on your tax bracket could be as high as 8.97%. I wonder if what your accountant means is that you've been taking depreciation for many years, and consequently the tax cost basis is now quite low - perhaps near $0. So now paying 8.97% on the difference between the selling price and your tax cost basis is equivalent to paying 78% of the actual gain (meaning the differece between selling price and what you originally paid for the property) - is that what he means? Remember: when you depreciate a property you are merely delaying taxes, and eventually you have to pay up - typically in capital gains when you sell the property (unlesss you roll the proceeds into another property).