Schedule K-1

[mertk]

I received a Schedule K-1 for a Trust sourced in California for $661 Net Long-Term Capital Gain. I live in Oklahoma. It appears that I need to complete a CA Non-resident tax form. I have two questions:

1. Will both California and Oklahoma tax this Capital Gain?

2. Turbotax OK State asks "On your federal return you reported $660 of capital gains (or losses) from you Schedule K-1s. How much of this gain (or loss) was from the sale of qualifying Oklahoma property?"

2.a. I indicated that the "Oklahoma Income" was zero - is this correct?

2.b. The next question is to "Select Type of Property Sold." All the drop-down box options have to do with Oklahoma corporations or property, but this Trust is not related to any of them. How do I manage this? This is an error that requires correction before continuing. I don't see any way to resolve this on the Federal return, but perhaps I'm missing something.

[PatriciaV · Accepted solution]

No, the income should be taxed on the California non-resident return only. You exclude that income from the Oklahoma return by reporting the sale was not in Oklahoma.

Does the Schedule K-1 indicate the type of property that was sold for a gain? It may not matter what type of property you choose, since the income wasn't sourced in Oklahoma. You may need to adjust the reported gain to zero in order to fully exclude the income from the OK return.