I live in one state (Arizona) but sold an inherited property in another state (Wisconsin). Do I need to pay state of Wisconsin tax on that sale of that inherited property? I am reporting the capital gains sale on the Federal return. If so, where do I enter that on the state of Wisconsin tax form using Turbo Tax?
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Yes, if you reported capital gains on your Federal return for selling the Wisconsin property, you will also report it on a nonresident Wisconsin tax return.
Prepare the nonresident return before preparing your Arizona resident return. Follow the prompts in the Wisconsin state return in TurboTax to identify which income from your Federal return is sourced in Wisconsin.
See this FAQ page on the Wisconsin tax agency's website.
See also this TurboTax article on multiple-state situations.
In the MY INFO tab you should have indicated you earned income in another state other than the one you live in then when you get to the state section the WI will be listed first ... complete the non resident WI return FIRST (even if you will file it later) so the credit on the AZ return will be computed correctly. In the WI state interview you will be asked how much of the FED income in each section belongs to WI so only the sale is reported on the WI return. REVIEW all the returns carefully BERORE you file them ... if you need to make corrections it is better done before you file then after you file.
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