Sale of condo - partly rented in one state live in another state.

[Janssenj]

We had a condo in Minnesota. It was used about 80% for business and we used it around 20%.   We sold it in 2020.   The gain from the business part, I know is Minnesota revenue.  What about the gain on the personal use?  Do I report it to Minnesota or my home state of Missouri?

[ColeenD3]

Yes, any gain is taxable to Minnesota, unless it was excluded. It will also be taxable in your home state. Check to see if MO allows a credit for taxes paid to another state.

[Janssenj]

Thanks.   Missouri does have a deduction for taxes paid in the other state.   Thank you.

[JoannaB2]

It depends.  The gain on the sale of Condo used for business (80%) is taxable on your  federal and your local state.  The 20% personal use may be non-taxable, if you live 2 years out of 5 years you owned the property.  Internal Revenue Code (IRC) section 121 allows homeowners to exclude a certain portion of their capital gains when they sell their primary residence. Under IRC section 121, a taxpayer must own and occupy the property as a principal residence for two of the five years immediately before the sale. However, the ownership and occupancy need not be concurrent. The law permits a maximum gain exclusion of $250,000 ($500,000 for certain married taxpayers). federal ruling on Section 121 Exclusion.  State of Minnesota conformed to the federal ruling on Section 121 Exclusion.

[Janssenj]

Thanks.  It was never a residents, just a rental with some vacation usage. Thanks for the information.