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Capital Gain Exclusion or possible taxes in two states? Changed Primary Residence, Home Sale in Different State

Fang808 — Thu, 27 Feb 2025 22:44:41 GMT

Hello,

Here is my situation, I owned a home from 2019 to 2023 in Maryland and moved to Hawaii on 01/01/2024. I sold the Maryland home on July 2024. I plan to sell my Hawaii home on 01/01/2026. My capital gain from Maryland home is 80k, and possible capital gain from Hawaii home is 100k, From IRS publication 523, I need to report the gain from Maryland home if I want to take the exclusion from Hawaii home in the future. If I choose to do so, which state tax I should file since I am living in Hawaii, but the property is located in Maryland during the sale process??

Thank you in advance.

Re: Capital Gain Exclusion or possible taxes in two states? Changed Primary Residence, Home Sale ...

KrisD15 — Thu, 27 Feb 2025 23:01:17 GMT

Yes, if the sale was Maryland property you will file a Maryland NON-resident return and claim that capital gain.

You will next file a Hawaii state return and claim all your income (including the capital gain) however the Hawaii return will give you a credit for the tax paid to Maryland.

The order you do the state returns is Maryland, then Hawaii so the program can compute the credit on the Hawaii return.

Re: Capital Gain Exclusion or possible taxes in two states? Changed Primary Residence, Home Sale ...

Fang808 — Fri, 28 Feb 2025 03:56:52 GMT

Thank you so much!