It depends. More detail would be needed to understand the switch from standard to itemized deductions and vice versa. Review your tax return both ways to see what the differences are by using Preview My 1040 (click the link for instruction).
The state where the property is situated is going to tax the gain. Likewise the state where you reside requires worldwide income. The difference is that your resident state recognizes that and will provide a credit for taxes paid to another state on the same income. The credit that is allowed will be the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by your resident state
If the nonresident state had been prepared first then TurboTax would know the numbers. Make sure to write down the tax liability for the nonresident state return (WI), then when you go through you resident state return enter that in the credit section described above. Have the gain available as well.
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