I changed my job so I moved from MD to NJ, and sold my condo in MD 2021 with a loss. In NJ state return, it asks me if "Any sales of property not subject to NJ tax"? And I clicked on YES. It shows not just that sold property but also a list of stocks I made gain or loss in 2021 -- do I click on "Omit" all of them?
I check-box "Omit" on stocks that lose money, then my NJ tax payment increases. If I check-box "Omit" on stocks that made money, then my NJ tax reduced. -- why?
I don't understand why stocks are the "property" here which I have never seen this in state return before. And the "gain/loss" does not seem logically to me.
Stocks are property that are bought and sold just like the real estate property. Therefore there will be a taxable gain or a loss on the transactions. That federal gain or loss is transferred to your state returns and must be allocated to the state you were in when the gain/loss occurred.
When you check the box to "Omit" the transactions that are losses that means all the gains are still in NJ (tax owed increased) If you "Omit" the transactions that are gains then only the losses remain in NJ (tax owed decreases).
Stocks are property that are bought and sold just like the real estate property. Therefore there will be a taxable gain or a loss on the transactions. That federal gain or loss is transferred to your state returns and must be allocated to the state you were in when the gain/loss occurred.
When you check the box to "Omit" the transactions that are losses that means all the gains are still in NJ (tax owed increased) If you "Omit" the transactions that are gains then only the losses remain in NJ (tax owed decreases).
Thank you very much for the clear explanation that makes sense to me now! May I ask, so do I check all the "Omit" boxes or leave them as blank? If I did not sell a house in MD (lived in NJ full year), then I probably would never see these "stock" properties (so no trouble on what to do)
You are correct so neither box would be checked. They are all subject to NJ taxes just as though you had never seen them.
Thank you so much for so timely response at the last min!! It makes sense to me now, that these stocks gains/loss are also subject to NJ tax :(
So sorry, can I ask additional question? For Fed, the long term stock sell is not taxed if it is under ~$40k gain. But it seems that at the state level, it does not count long-term or short term, it (every penny, regardless how long of the holding) is all taxed if one is in a taxed state -- do I understand it right?