I am a resident of Virginia and sold at a gain a second home located in North Carolina. Do I need to report the gain in each state as ordinary income or capital gain?

[danstegall]

House was sold and closed in 2016

[TomD8]

You have to report it as a capital gain in both states.  But you'll be able to take a credit on your VA return for the tax paid to NC, so you won't be double-taxed.

[TomD8]

"House was sold and closed in 2016" 

If the gain wasn't reported on your original 2016 return(s), then you'll have to file amended 2016 return(s).