Long term capital gain tax

[user17653802278]

I just sold my house in Missouri and I am moving to Illinois. Will I owe Illinois long term capital gain tax on what was earned for my house sale in Missouri?

[M-MTax]

If you closed and received the proceeds prior to relocating to Illinois, then Illinois cannot tax your gain.

If you closed and received proceeds while a (part-year) resident of Illinois, you should be able to get a tax credit for any tax you paid to Missouri on the transaction (Schedule CR, IL-1040).

[Hal_Al · Accepted solution]

If you sell the house after you move, you are  subject to IL tax because you are an IL resident at the time the capital gain was realized (received). But, you're still subject to MO tax because the property is located in MO.  But, as others have said, IL will give you a credit for any tax paid to MO.

Both MO and IL follow the federal tax exclusion on the first $250,000 ($500K married)  of home sale  capital gain.  To qualify you must have owned and lived in the home for 2 out of the 5 years prior to the sale (reduced exceptions to  the two year rule are available depending on the reasons for the move; job change being the most common). 

For tax years beginning on or after January 1, 2025, Missouri law (HB 594) allows individuals to deduct 100% of all capital gains reported for federal income tax purposes when determining their Missouri adjusted gross income.