Full year versus part year resident

Forum|Forum|7 years ago
June 1, 2019
1 reply
6 views

My husband started a new job January 1, 2016 in Colorado. We didn't sell our house in Kansas until 2/11/16. He worked in Colorado starting 1/1/16. Do we need to file as part year residents in each state? Just do Colorado since the only income came from Colorado and that's where we lived? We took a loss on the home sale so do not owe taxes on it according to turbotax and should not even include in the return.

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Anonymous

Let's start with the easy part of your question first. You are indeed correct that if you experienced a loss on the sale of your main home, you do not owe any taxes on that (nor can you take a tax benefit for the loss, unfortunately) and neither do you have to report that event in any way on your tax return.

That said, the other part of your question is slightly more problematic. If your husband took the new job in Colorado at the very beginning of 2016, you put your Kansas house up for sale either before or around that same time, and he didn't commute back and forth to work (from Kansas to Colorado), then a clear argument could be made that he had abandoned his Kansas residency in favor of Colorado, or made an unmistakable intention to do so. And in that instance, if you had no Kansas-source income yourself (such as a Kansas job, or non-wage income like pensions, rental property, investments, etc.), then you could both file as full-year Colorado residents, and not file a Kansas state return.

Otherwise, in the absence of these factors, it would seem that for 2016 you would need to file a Kansas part-year resident return for that brief period of Kansas residency in 2016, and then a part-year resident return for Colorado to cover the rest of the year.

One other tax event that comes to mind by the raising of your question is that of tax deductible moving expenses. Unless your husband's employer covered the entire cost of your move, you may be entitled to take a tax deduction. You can read more about this at the following webpage:

https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/Guide-to-IRS-Form-3903--Moving-Expenses/INF19199.html

If you have further questions, encounter any difficulties, or just want to speak with a live tax expert who can walk you through your TurboTax entries (including the ability to screen-share with your computer), please feel free to contact us. We would be happy to help you (and as a paying customer, the call is free to you). Here is a link where you can create a support ticket and reach us:

https://support.turbotax.intuit.com/contact/

Thank you for asking this question.