tax on sale of vacation home

[Varbit1]

I've seen a few posts for this already, but just want to be very clear. I live in New York and recently sold a vacation home in Massachusetts. From what I've seen I have to file a nonresident form for Massachusetts and report the capital gains there. For the resident New York return, I should report the capital gains there also but then select a tax credit for "Taxes paid out of state" to prevent taxing the capital gains in both states. Is that correct? Is the selection for the credit on the New York return called the "Resident Credit"?. 

[rjs]

You are correct about what you have to do. And yes, on the New York tax return the credit for tax paid to another state is called the Resident Credit.

[Vanessa A]

Depending on which version of TurboTax you are using, it may be called the Resident Credit.  You should find this is under Credit for taxes paid>>Taxes Paid to another state.

Yes, you will file the MA Non-Resident Return and pay taxes on the capital gains in MA.  Then you will file your NY Resident return, and take a credit on form IT-112-R which is the Resident Credit form, for the taxes paid to MA. It is possible that you will still owe some taxes to NY on the sale.  NY will still calculate the full amount that you would owe on that sale.  So if you had NO other income at all and if the full amount you would owe to NY on that sale would be $4,000 but you only paid $3,000 to MA, you would still end up paying that extra $1,000.  If you paid $5,000 to MA, then you wouldn't owe anything to NY because the credit amount would be more than you owed to NY, but the credit is then limited to the $4,000 so you would not get a refund of the additional $1,000.  

Multiple States - Where To File

[Varbit1]

Thank you both for that information. That helps a lot.