Pennsylvania has this wrong in their notice. I suggest you call them back. They are correct that Virginia and Pennsylvania are reciprocal states, but the following link (state of PA website) says clearly that the reciprocal agreement applies only to employee pay, not capital gains: How does working in a reciprocal agreement state affect my state income tax?
Pennsylvania should allow you to claim a credit for the capital gains because it appears that the capital gains in question is taxable to Virginia. (Click here for a consideration of Virginia's taxation of nonresident income). Or the correct treatment in Pennsylvania is to "simply" exclude the income (there is a way to do this in TurboTax if this is the correct treatment). So my recommendation is to call Pennsylvania and find out if they sent you that notification in error or if the correct treatment is to exclude the income as not taxable in PA. If the former, the phone call should resolve it. If the latter, you will need to prepare a Pennsylvania (not Virginia) amended return. If that is the case, and you have questions, please re-post those questions and we can provide further guidance.
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