capital gains

[wade99]

I had some capital loss from stock sales last year. I also had some capital gain from a property sale. Can I use the loss from stock sales to offset the capital gain from property sales? I guess it is okay at the federal level. However, at the state level, how does it work? I sold my rental property in MO after I moved from MO to NJ. I guess that if the stock loss can be included in the state filing, it can offset the gain. For example, stock loss happened while I was in MO, I can use it to offset the gain from property sale. However, if the loss happened after I moved to NJ, it cannot be used to offset the gain in MO return. Am I correct?

[ErnieS0 · Accepted solution]

Your property sale is taxed by Missouri and New Jersey. 

It’s taxed by MO because the property is in MO so it’s MO income even if you were living in NJ when you sold it.

It’s taxed by NJ because you were living in NJ on the date of sale. NJ residents pay tax on income received anywhere.

Capital gains are sourced according to your state of residence on the date of sale.

You can use MO capital gains against the property sale on the MO return.

However the property sale would be fully taxed by NJ because you had no capital losses while living in NJ. However you can claim a credit for MO tax paid on the NJ return because the property sale is being taxed by both states.

[wade99]

Thank you ErnieS0!   If I understand you correctly, stock investment losses (both short term and long term losses) incurred while I was a MO resident can be used against capital gain from the sale of my MO rental house when I file MO return, but I cannot use them when I file NJ return. However, if I also have stock investment losses in NJ, I can use these NJ losses against this capital gain in NJ return.