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Level 1
posted Mar 14, 2022 11:49:06 AM

Part-year capital gains (CA-PA) allocation question

  • I lived in California in 2021 working remotely.
  • Moved to Pennsylvania permanently in August 2021 and continued to work remotely.
  • While living in California, I had capital gains where my last sales happened in July (so before moving to PA)

In TurboTax (online) my Pennsylvania state return is taking those capital gains and adding it to my total income.

 

Is this correct and why is it happening? If this shouldn't be the case then:

     Do I go to the "Schedule of Gains/Losses" section and select each sale as "This sale is not taxable in PA"

or

     should I do this in the "Credit for taxes paid to other states" double taxed income section?

 

I am a little confused how to do this correctly or why Pennsylvania is taking those sales to consideration as my income even though they happened prior to moving. 

 

I would like elaboration on this situation and correct path forward in TurboTax to file correctly.

 

Thank you

- Happy taxpayer

 

 

1 2 732
1 Best answer
Expert Alumni
Mar 14, 2022 2:53:35 PM

Yes. Tell TurboTax the sale is not taxable to Pennsylvania. TurboTax does not know whether to include this in PA income unless you tell TurboTax what to do.

 

Here's how to remove your capital gain from Pennsylvania:

  1. In Pennsylvania keep going to PA Gains and Losses
  2. Find the sale on Schedule of Gains/Loss and select This sale is not taxable in PA

Part-year residents are taxed on stock made while they were residents.

2 Replies
Expert Alumni
Mar 14, 2022 2:53:35 PM

Yes. Tell TurboTax the sale is not taxable to Pennsylvania. TurboTax does not know whether to include this in PA income unless you tell TurboTax what to do.

 

Here's how to remove your capital gain from Pennsylvania:

  1. In Pennsylvania keep going to PA Gains and Losses
  2. Find the sale on Schedule of Gains/Loss and select This sale is not taxable in PA

Part-year residents are taxed on stock made while they were residents.

Level 1
Mar 15, 2022 12:15:25 PM

Thank you sir, I appreciate the prompt response. This is exactly why I needed to confirm with TurboTax experts. I hope others find this helpful.

 

You are the best!