I sold a rental property in 2019 that my brother and I have co-owned for several years. I am a full-year resident of SC, and he is a full resident of TN. We received no income from rent in all of 2019. My half of the 2019 expenses and losses on this property was approximately $18,000. I took these losses on my Federal Taxes and showed that information on my SC taxes. It appears that SC taxed my capital gains as shown by TurboTax. Does this indicate that my capital gains are exempted from NC taxes?
Is the property you sold located in North Carolina? If so, you should file a Non-Resident State Return to North Carolina to report the sale of the rental property (as well as income and expenses).
Prepare the Non-Resident return first.
Click this link for more info on Sale of Rental Property in Non-Resident State.
This link gives more info on Filing a Non-Resident Return.
Yes, the property is in NC.
Is there reciprocity for capital gains taxes between NC and SC, where I am a full-time resident? Turbo Tax seems to indicate this by altering my tax/refund number depending if I list sales expenses/losses or not on my SC state taxes. I interpret this as telling me that Turbo Tax is saying there is reciprocity.
No, there is NO reciprocity between North Carolina and South Carolina.