Mary,
Thanks for the reply, but I don't believe what you wrote is correct.
I did 2 hypothetical runs in turbotax today to see the impact of the sale of a 2nd home in NJ. Turbotax filled in the NJ non-resident tax form. I put in a 1099S form for the sale of the house claiming $150K in capital gains on the sale of the house. The $150k showed up as taxable income on the NJ 1040NR. I then did one run with $0 Capital losses and another run with $150K of capital losses. The run with the $150k of capital losses reduced my NJ taxable income by $150K.
