How file out of state sale of inherited property

[cuburleson]

I am a full-time resident of NC. We inherited and sold my father-in-law's house and property in Virginia. We received a form 8949 from the sale. The sale generated no capital gains or loss. I reported it on the TurboTax federal form and NC.  Do I need to file with Virginia and if so, how do in indicate that land was in Virginia? 

Thanks a bunch for any help!

[MaryK4]

Since there was no gain or loss, if you had not other Virginia income, you do not have to file.  

YOU DO NOT HAVE TO FILE IF YOU ARE:

Single and your VAGI is less than $11,950

Married filing a joint return (both must have Virginia Source Income) your combined VAGI is less than $23,900

Married, spouse has no income from any source and your VAGI is less than $11,950

Married filing separately (on separate forms) and your VAGI is less than $11,950

[cuburleson]

Thank you so much for your reply! My concern is that it seems that VA would expect to see a tax return to match the form 8949 and my SS number that was reported to them at the time of the sale. Do I not need to close that loop? 

Thank you again, Ken

[MaryK4 · Accepted solution]

From the Virginia 763 Instructions: "Income from Virginia sources is income received from labor performed, business done, or property located in Virginia, including gains from sales, exchanges or other dispositions of real estate and intangible personal property having a situs in Virginia..."

The Virginia definition specifically says gains from sales as opposed to just income from the sales or gross income from the sale, in which case they would require a state 8949 to show the basis.  

If you received a 1099-S, Virginia only requires 1099s to be filed if Virginia tax tax withheld. 

@cuburleson

[cuburleson]

I did grab the incorrect form. You are correct, I received a 1099-S from the sale.  Thank you so much! I would never have figured out that I did not need to file with them. 

[Chas56]

I have the opposite problem. I am a VA resident who has recently sold inherited property. I have a 1099-S from NC. Do I need to file a NC tax return? VA will tax me on the capital gain.

[ErnieS0]

Yes, file a nonresident North Carolina income tax return. 

North Carolina says if you were not a resident of North Carolina at any time during the tax year 2022 but you received income from North Carolina sources that was attributable to the ownership of any interest in real or tangible personal property in North Carolina and your total gross income from all sources both inside and outside of North Carolina equals or exceeds the amount in the Filing Requirements Chart for your filing status, you must file a 2022 North Carolina individual income tax return, Form D-400.

Virginia will give you credit for any tax paid to NC on the VA return.

@Chas56

[Chas56]

Ernie, the deed is done - seems everyone got a piece of the action.

Thanks for the info.

Charlie