Michigan Resident, sold Florida property for a gain. No tax in Florida, but do Do I owe Michigan? And do I have to file in Florida anyway?

[drieg]

My Michigan return picked up the sale since I pay cap gains at the federal level?  But Turbo Tax asks me if the property was sold in a differrent state. Does that mean I dont pay taxes in Michigan?  But I dont know how to back it out of my Michigan retrun if that is so? Also, I think taxes arent due in Florida...but somewhere it said I needed to file a florida return.  Confused here.  Thanks

[tagteam · Accepted solution]

You do not owe anything to Florida since Florida does not impose an individual income tax.

Michigan, on the other hand, is going to tax you on all of your income/gains no matter in which state it was earned.

EDIT: See https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/2020/2020-IIT-Forms/MI-8949.pdf?...

Out-of-State Property. Gains from the sale of non business property located in another state are not subject to tax and losses are not deductible. Gains and losses from the sale of business property located in anotherstate are sourced based the location of the business activity.

[harold45]

My understanding is Michigan does not require capital gains tax on non business property sold out of state.  Therefore, a secondary home out of state would be excluded.

[tagteam]

---

@harold45 wrote:

My understanding is Michigan does not require capital gains tax on non business property sold out of state.  Therefore, a secondary home out of state would be excluded.

---

Do you have a cite for this or a link to anything authoritative for that proposition?

I found the following and it does not make mention of any such exclusion.

See https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/MISC/2017/2017_CC41011.pdf?rev=dde85d4...

[harold45]

Instructions for Completing Form MI-8949:  Out of State Property.  Gains from the sale of non business property located in another state are not subject to tax...

[tagteam]

---

@harold45 wrote:

Instructions for Completing Form MI-8949:  Out of State Property.  Gains from the sale of non business property located in another state are not subject to tax...

---

Thank you. I found the link and edited my original post.

https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/2020/2020-IIT-Forms/MI-8949.pdf?...

[harold45]

Second reply.  MI-8949.  Sale of Property.  Enter in the Michigan column the gain or loss from the sale or exchange of:  Real property located in Michigan.  A vacation property is obviously not located in Michigan.  So far as I can tell, there is no place to list a gain for sale of a non-business property outside Michigan.

[TomD8]

From the Michigan Tax Code R. 206.12 (7):

"Capital gains and losses from the disposition of real property are allocated to the state in which the real property is located."

https://www.law.cornell.edu/regulations/michigan/Mich-Admin-Code-R-206-12