Which state to file Capital Gains tax to??
Which state to file Capital Gains tax to??
Hi,
I live in MA and work in RI. This past year I sold a gold coin in RI and it is taxed as a collectible (28%) under the long-term capital gains reporting for my federal return. My question is, since I bought the collectible in RI years ago and also sold it in RI, should this only be reported on my RI tax return, and not on my MA tax return?
MA instructions say to report any income from long-term capital gains which are reportable to MA. But it doesn't specify what that means. Doesn't seem like I should have to pay taxes on it in multiple states. Any advice?
Or, do I report it in RI and calculate how much I owe RI, and then also report it in MA... but then the RI is technically subtracted from what I owe MA, so I might have some left over to pay. SImilar to how the rest of the state taxes work?
I'm assuming this question would be applicable for any 2 states.
Thanks,
I live in MA and work in RI. This past year I sold a gold coin in RI and it is taxed as a collectible (28%) under the long-term capital gains reporting for my federal return. My question is, since I bought the collectible in RI years ago and also sold it in RI, should this only be reported on my RI tax return, and not on my MA tax return?
MA instructions say to report any income from long-term capital gains which are reportable to MA. But it doesn't specify what that means. Doesn't seem like I should have to pay taxes on it in multiple states. Any advice?
Or, do I report it in RI and calculate how much I owe RI, and then also report it in MA... but then the RI is technically subtracted from what I owe MA, so I might have some left over to pay. SImilar to how the rest of the state taxes work?
I'm assuming this question would be applicable for any 2 states.
Thanks,
Re: Which state to file Capital Gains tax to??
Capital gains go to your home state. Follow the nonresident instructions for the other state for what, if anything, you report to them for capital gains.
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Re: Which state to file Capital Gains tax to??
Thanks,
It sounds like I need to report them to MA and also RI (they treat capital gains the same as federal). Whatever I pay to RI I get to subtract from my MA taxes due anyways so I should not be double taxed.
Just trying to double check to see if others have the same question.
It sounds like I need to report them to MA and also RI (they treat capital gains the same as federal). Whatever I pay to RI I get to subtract from my MA taxes due anyways so I should not be double taxed.
Just trying to double check to see if others have the same question.
Re: Which state to file Capital Gains tax to??
1) how does RI have a record of the sale in the first place?
2) How can RI tax you for Capital Gains when you are not a resident? Capital Gains are reported on the state tax form, right? -- how can a non-resident be required to file one in the first place? I don't see how a state has the authority to tax a non-resident, unless the tax was collected by the merchant.
2) How can RI tax you for Capital Gains when you are not a resident? Capital Gains are reported on the state tax form, right? -- how can a non-resident be required to file one in the first place? I don't see how a state has the authority to tax a non-resident, unless the tax was collected by the merchant.
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Re: Which state to file Capital Gains tax to??
Bongleur wrote: 2) how can a non-resident [of RI] be required to file one in the first place? I don't see how a state has the authority to tax a non-resident
He works in RI. Why would you think a state where you work but don't live can't tax you? The term is "source income." If the source is RI, RI is going to tax it. If the source is NY, NY is going to tax it. If the source is CA, CA is going to tax it. The only states I know of that won't tax source income are states that don't have an income tax.I live in MA and work in RI.
For example, here is what NY says about NY source income of non-residents:
http://www.tax.ny.gov/pubs_and_bulls/tg ... sident.htmIf you are a nonresident individual, estate, or trust, or a part-year resident individual or trust, you are subject to tax on your New York source income.
Re: Which state to file Capital Gains tax to??
I worked in PA and lived elsewhere. Didn't owe PA a dime. Would have rather paid PA, my residence state charged more.
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Tax Loss Harvesting is an Asset Class. |
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Re: Which state to file Capital Gains tax to??
Some states have reciprocity. I live in KY but work in Ohio. Never filed anything for Ohio except first year which said I live in KY. If that's the case you do only MA.
Re: Which state to file Capital Gains tax to??
Ah yes, reciprocity. In that case, the theory would be that the you owe the state a return and a tax, but because of a side agreement based on the numbers of people who cross borders to go to work, the state waives its right. Here is what PA says:
butNonresidents of Pennsylvania. PA law taxes the income you earn, receive and realize from PA sources.
If you live in NY and work in PA, you pay. It is also true thatReciprocal Compensation Agreement States
Pennsylvania has agreements with Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia. Generally, under these agreements, one state will not tax a resident of the other state on compensation that is subject to employer withholding.
If you are a resident of a reciprocal state working in Pennsylvania and your employer withheld PA income tax, you may request a refund of the PA tax. You report zero taxable compensation on Line 1a, and the PA tax withheld on Line 13.
To the OP: I believe that you follow the instructions. What do the MA instructions say? I know you quote the word "reportable," but if you forget where you bought the coin and where you sold it, would you report it on your return? Do the instructions exclude items bought and sold in other states? I doubt that MA excludes those sales. You buy and sell shares at Vanguard in PA but you still pay MA tax on your capital gains, don't you?Nonresidents do not pay PA income tax on gains realized on the sale, exchange or disposition of intangible personal property, such as stocks and bonds, nor may nonresidents use the loss from such sales against other taxable gains.
Re: Which state to file Capital Gains tax to??
Yes, I bought and sold the coin in RI, so I ended up reporting it on both RI and and MA. But again, I wasn't double taxed because I subtract anything I pay to RI from what I owe to MA.sscritic wrote: To the OP: I believe that you follow the instructions. What do the MA instructions say? I know you quote the word "reportable," but if you forget where you bought the coin and where you sold it, would you report it on your return? Do the instructions exclude items bought and sold in other states? I doubt that MA excludes those sales. You buy and sell shares at Vanguard in PA but you still pay MA tax on your capital gains, don't you?
And no, I have no clue if RI has a record of the transaction or not, but it's the right thing to do!Bongleur wrote:1) how does RI have a record of the sale in the first place?
Re: Which state to file Capital Gains tax to??
If it is a taxable event in the state, it doesn't matter if they have a record of it. Unless one is a proponent of tax evasion, it needs to be reported.Bongleur wrote:1) how does RI have a record of the sale in the first place?
Many states tax non-residents on income sourced in that state. For example, if you own rental property in the state and collect rents, you are likely subject to income tax in the state where the property is located whether you are a resident or not.Bongleur wrote: 2) How can RI tax you for Capital Gains when you are not a resident? Capital Gains are reported on the state tax form, right? -- how can a non-resident be required to file one in the first place? I don't see how a state has the authority to tax a non-resident, unless the tax was collected by the merchant.
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