We inherited money from a farm sale in Iowa and we live in Arizona. The trust took out 20% from the inherited amount to the state of Iowa. We have entered the K1's in the proper area on turbo tax premier and have entered the inherited amount in our Arizona state under long term capital gain assets acquired after 2011. My question is do we file a Iowa state return and if so where do I enter the 20% monies already paid to the state of Iowa and do I also file a IA 1041 to the state of Iowa? I can't be taxed in both states for the inheritance so I am confused what to do. Thank you.
What happened appears to be an Iowa pass-through withholding tax.
You will have to file an Iowa return in order to get a refund of the withheld amount.
So all I have to do is purchase a Iowa states module to complete my taxes for these K1's and the IA 1041 and IA 1040es statements that I have? Thanks!