@HH125 --
Here's how it works:
Assuming both states have an income tax, the capital gain from sale of property located in a non-resident state is taxable by both the non-resident and the resident state (the latter can tax all your income regardless of source).
So at year's end you'll file both a non-resident state tax return (reporting your capital gain) and your normal resident state tax return (reporting ALL your income, including the capital gain). You'll enter the withheld taxes as an estimated payment to the non-resident state. And you'll claim a credit on your resident state return for the taxes paid to the non-resident state, so you won't be double-taxed.
In TurboTax, be sure to complete the non-resident return first, before the home state return, so that the program can calculate and apply the credit correctly.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
