Allocating Capital Losses between two States

[rcmaurer]

Moved during 2024. Part time resident in Georgia and North Carolina. My federal return will show a capital loss limited to $3000. Both states had capital losses with the total capital loss for each state significantly exceeding $3000. Is the capital loss for each of the states limited in total to a share of the $3000 Capital loss shown on the Federal return? 

[DianeW777]

Yes, that would be reasonable.  The capital loss included on the federal return would cover the 12 months of 2024.  If possible you should determine what was sold during the residency period for each state.  It's possible to have a gain in one state and a loss in the other, without knowing the specifics of your situation. 

If your transactions were all done at the same time, then it would be included only on the state where you resided at the time of the transactions.

If you are unable to specifically determine the sale in each state, you may have to take an estimate for each state.  It's important to allocate to each residency period.

All that being said, some states do not recognize nor allow you to carryover any losses.  

• Georgia (GA) rules: Capital losses may be used to offset capital gains. If the losses exceed the gains, up to $3,000 of those losses may be used to offset the taxes on other kinds of income.
• North Carolina (NC) rules: It appears the capital losses can be used on the NC part year tax return. There is no adjustment to remove it from the federal adjusted gross income (AGI). However you will adjust for your part year residency.