Q. Do we need to pay Virginia?
A. Yes,
The reciprocal agreement is only on wages. A capital gain on WV property is WV source income. You need to file a WV non resident return and pay WV income tax. There's a chance that you'll get some of the withholding* back. Then you include the gain on your VA return. VA will give you a credit, or partial credit, for the net tax paid to WV. Prepare the WV return first (so TT will know how to calculate the credit on the VA return).
Q. Is there is a page in the Turbo tax software to capture the capital gains tax (withholding) paid to WV??
A. Yes. It's "hidden" in the federal section.
In TurboTax (TT), enter at:
Federal Taxes Tab
Deductions & Credits
-Scroll down to:
--Estimates & other taxes paid
-Other Income taxes
On the next screen, scroll down to
-Other income taxes paid in 2022
- Withholding not already entered on a W-2 or 1022
-On the next screen, enter the amount of withholding and the state
*You said "the attorney who brokered the closing calculating our capital gains and paid WV". You did not actually pay the tax. You just had withholding done, an estimated amount of the tax (the estimates are usually too high).
