I sold a rental house in another state and paid taxes to that state at the time of the sale.
When filing taxes for my home state of MA, can I deduct this?
I see the section “Income Taxed by Rhode Island”.
Do I enter the net profit of the RI house as “Total Long term capital gain income” and the taxes withheld at the sale as “RI Tax paid on this income”?
In the program, you should have encountered these screens. They specifically apply to your situation. In addition, you will see Nonresident Withholding on Real Estate Sales.
I do not see these screens. I am only filing a state return with my home state, MA. Do I need to fill out a return for RI too?
Yes you will need to file a Non-Resident Rhode Island return since you had withholding in that state.
If this form is completed showing the gain related to RI; should the gain be excluded from Massachusetts income tax? Or will a credit be calculated based on taxes paid to other states?
Yes, if you prepare your RI non-resident return first and prepare it correctly, a credit will appear on your Massachusetts return based on the tax you paid to RI.