We sold property in TN but are residents of GA. Do we file state taxes in TN?

[levelup1900]

We are residents of GA. We sold our vacation home in TN in 2018. Bought in 2015 and only personal use. Proceeds being taxed for Federal under capital gains. Do we file state taxes in TN related to the capital gains on property? If not, does the full income from Federal taxes, including sale of TN property, move to GA income for tax calculation?

[AnnetteB · Accepted solution]

No, you do not need to file a TN return related to the capital gains on the sale of your property.  The TN tax return only taxes interest and dividend income when applicable.

Since the capital gain will not be taxed by TN, there will not be a credit on your GA return for taxes paid to another state.  Also, there does not appear to be an adjustment that would be made on the GA return because the gain is attributed to property in another state.  This means that the full gain will be taxable on your Federal and GA return.