in what state are royalities claimed

[j-lehman]

I live in one state and own property in another.  This property earns royalities.  Do I pay the taxes on the royalities in the state I live, the state the property is located, or both?

[Vanessa A]

This does partially depend on the state, but if you live in one state and earn royalties on a property in another state, you will generally claim the income on both state returns.  You will file a non-resident return for the state that you own the property but do not live in and a resident return for the state you live in.  You will file the non-resident return first, then claim a credit on your resident state for taxes paid to another state.