I live in Georgia. We sold timber in Alabama. Company living on the property handled the logging and expenses sent us a 1099-S that showed the remainder... total income from the logging, minus logging and reseeding expenses. I think this is filed as capital gains. But do we need to file an Alabama return, too? The property is co-owned by three parties, two of whom live in Alabama. We are in Georgia. Do we need to include this on our Georgia return?
Yes, the timber sale would be included in your state return. Record the sale in your federal return in the Investment section and the capital gains income will carry to your state return. You may also need to file an Alabama nonresident return. According to the Alabama department of Revenue, you must file a return if Alabama income exceeds the allowable prorated exemption.
If an Alabama return is required in your situation, complete the nonresident state return before your resident state for proper calculations.