Tax on out of state property sale

Forum|Forum|3 years ago
November 16, 2022
1 reply
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What is the tax liability for income from an out of state property sale?

OmM1

Level 5

Hello Debicanshop

When you have a gain / income from outside of your resident state, you are required to report this by filing non-resident tax return for that state and will pay taxes, at the rates applicable for that state only on the income generated in that state.

You will also report this out of your resident state income on your resident state tax return, are be able to claim credit for taxes paid to the other state. It is however to be noted that you may not get dollar for dollar amount of credit. The amount of credit depends upon the rates of other state, if other state has higher tax rates than you resident state, then you may get only partial credit but if the other state has lower taxes than your resident state tax rates, you may get a full credit.

Hope this answers your question fully, if not, please feel free to ask additional question.

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