Income tax on property sale in different state

[mollieinmontana]

Do Montana residents have to pay income tax on the money made on the sale of a rental property in another state?

[Opus 17 · Accepted solution]

If you have a capital gain (income) from selling property in another state, that is considered income that is "sourced" to that state.  You would be required to file a non-resident return for that state to pay any income tax owed to that state because the income came from that state.  If you live in a state with its own income tax, you get an offsetting credit in your home state so you aren't double-taxed. 

[mollieinmontana]

That is great information. Thank you so much!