If my wife and I are filing separate state returns (MFS) how should I report the sale of our primary residence (capital gain) and vacation house (capital loss)? Split even between the two states?

[DDollar · Accepted solution]

If you are in a community property state, that is the way you are required to allocate.  If you are not in a community property state you can allocate any way you please if it is joint property.  If it is not joint property you should allocated according to who owns.