Military member selling home in NJ, TAX question?

[Frank C.]

Hey everyone,

I am a investor with experience in SC, NC, & TN. I have a fair deal of experience with the real estate laws/codes in those states, but I have a colleague ask for advice today and I am hoping that you can help. Bottom line, he is selling a once primary residency home in NJ, but is not a resident of NJ due to active duty military commitment/mandatory moves. He will not have to pay federal capital gains tax because of the "Military Family Tax Relief Act" because 10 yrs period has not expired. His "gain" on the sale is zero, but I have no advice when it comes to NJ sales/income tax. Can someone help?

"Any advice you can offer about how to alleviate a New Jersey non-resident income tax payment would be appreciated.

I am active duty military stationed in North Carolina. In 2006, my wife and I purchased a home in Pemberton, NJ while on active duty in McGuire AFB, NJ. In 2011, I received orders to move to Washington, D.C., followed by another move to North Carolina in 2015. From May 2011 to May 2017, the home was always rented and we never used it as a principle residence. We did not own homes in DC or NC.

We sold and closed on the home last week. Our original purchase price in 2006 was $275k, but we sold in 2017 for $248k. NJ tagged an additional 2% non-resident income tax on the sale price $248k; almost
$5k tax. I am an Ohio resident and pay state income tax there. My wife is a Florida resident for tax purposes, but FL does not have a state tax. We have never been an NJ resident and never paid NJ taxes
even when stationed there 2006-2011.

Is there anyway to get a refund on the NJ $5k tax? Additionally, any recommendations for a good CPA in NJ with experience handling out-of-state military tax issues?"

I really appreciate your time to help with this question.