A rant from Stephen M. Flatow
There are times when I am embarrassed living in New Jersey. Case in point, the Division of Revenue’s roll-out of a new GIT/REP-3 form dated (8/25) which the legal and related industries were not informed of until late in September/early October. Why am I in rant stage? Because the county clerks are now rejecting deeds that do not have the current form attached.
The rant - When something is kept secret, how are form users supposed to know about the change?
Wow, documents being rejected because they were accompanied by a now out of date form. And that caused me to look at the form to see what changed between last year’s form and the current form. And do you know what I found?
Assurance 2 changed.
The 2024 form says: “The real property sold or transferred is used exclusively as a principal residence as defined in 26 U.S. Code Section 121.”
The 2025 form says: “The real property sold or transferred is used exclusively as a principal residence as defined in 26 U.S. Code section 121. See instructions.” That’s it, “see instructions! That’s the change in the assurance.
The instructions have changed, but do not change the effect of Assurance 2. The instructions in the old form says: “Any seller claiming the principal residence exempt (bos2) must also be claiing an income/gain exclusion for the property being sold on their federal income tax return (26 U.S. Code section 121.”
The new form says:
“Box 2. Any seller claiming the principal residence exemption in box 2 who determines that their gain will be in excess of their income exclusion for federal and State purposes, may make an estimated payment using Form NJ-1040-ES to the State after recording, and does not need to submit an additional GIT/REP-1 and estimated payment to the county at the time of recording the deed. Note: Checking box 2 is valid, acceptable, and permissible, despite a paper gain based solely on the sales price, as determining the amount of the actual capital gain on the sale of real estate may only be subsequently known once a seller gathers all the documentation to determine their federal and State basis in the property for determining the exclusion amount.”
Translated, it says that if you know the gain is greater than the exclusion, you may file an estimated tax payment, if you wish to do so, and then goes on to say, in effect, don’t worry about it because you may not know your full gain until you gather all your tax related paper work in the future.
What we are seeing here folks is faceless mandarins sitting in the back rooms of the Division of Revenue looking for make-work.
Rejecting a deed because it is not accompanied by the current form is a waste of everyone’s time and resources. New Jersey can do better.
