1099-B gains on State returns

[Anonymous]

I am resident of NJ. I received 1099-B (stocks). Do short-term and long-term gains from 1099-B add to NJ income? Also, since I am filing PA state due to a rental property there, do short-term and long-term gains from 1099-B add to PA income?

[IsabellaG]

Yes, capital gains are added to your NJ taxable income. NJ makes no distinction between long term and short term capital gains, and taxes them both at the same rate as all income.

As a nonresident of PA, you won't be taxed on the 1099-B capital gains.

[Anonymous]

Thanks for your kind reply. With regards to PA State form, you confirmed my initial thought. However, I see that capital gains are added to the PA income. How do I correct this in TurboTax?

[IsabellaG]

As you prepare your Nonresident PA return (make sure that's the residency status) you'l reach a screen, "Schedule of Gains/Losses." Check the box "This sale is not taxable in PA." I added screenshots to my answer above.

[bigslimdog]

This is a good answer and is helpful to me.  However, as someone who is going through this at the moment, I really wish there were a way to bulk edit the entries in this list and mark them as "not taxable".  When the list is long, it takes many hours to click the Edit button next to each gain/loss, check the "not taxable" box, click Continue, and then scroll back down to the next entry to repeat.

Perhaps this feature can be incorporated into a future update.

[fanfare]

As an active investor, be aware that your category Box A sales without adjustments do not require Form 8949, so there is no reason to key in or import those transactions.
Instead use the "enter a summary" option to put your numbers on Schedule D Line 1a.
--
If you have wash sales, it gets more complicated since those adjusted transactions have to be itemized on Form 8949 and the summary totals adjusted accordingly.