@petetuit wrote:
1) . . . The amount from IT-203 line 31 is my NY AGI, but the interview question is looking for the double-taxed income *while a resident of NJ*. So I believe the amount I need there is not what is in IT-203 line 31, but rather the full year W2 wage income, prorated for the % of the year I lived in NJ.
You are correct. You should enter only the amount of New York wages that you earned while you were a resident of New Jersey. Sorry.
Making this change will result in a small amount of tax due on your New Jersey part-year resident return. The credit should essentially eliminate any New Jersey tax on your New York wages, but you have to pay New Jersey tax on the investment income and rental income for the period that you were a New Jersey resident.
@petetuit wrote:
2) The mortgage interest deduction is turning into a real challenge due to the move.
First question - when I calculate the federal mortgage interest deduction, can I take the deduction on both mortgages during the overlapping period? I owned both houses but obviously only lived in one at a time.
Yes. On your federal tax return you are allowed to deduct mortgage interest on two homes - your main home and a second home. So there is no problem deducting the mortgage interest on both homes for the period that you owned both.
@petetuit wrote:
Second question - How does the part-year calculation work for the NY state returns? Do I prorate for the period of time I lived in that state?
Apparently not. I have no experience with this, but I don't see anything in the New York instructions or forms about prorating deductions. Form IT-203 line 33 is the full-year New York itemized deductions (or standard deduction). On line 34 that gets subtracted from the full-year federal AGI that is carried from line 31 in the federal column. The tax is then initially calculated on the full-year amounts. Apparently the multiplication on line 46 by the income percentage effectively takes care of prorating everything.
@petetuit wrote:
And then wouldn't the second mortgage from 8/9-9/27 be limited to NY's $1mm mortgage principal limit?
I'm not familiar with the mortgage interest limitations at all. But the New York instructions refer you to the 2017 federal Schedule A instructions and the 2017 IRS Publication 936, which clearly say that the $1 million limit applies to the total of the mortgages on both homes.
2017 federal Schedule A instructions
2017 IRS Publication 936
(See "Limits on Home Mortgage Interest Deduction" on page 9)
Maybe someone else can provide more detail on this. @SteamTrain Can you add anything regarding the mortgage deduction?
