Sold a second home in NJ resulting in a capital gain. Is the capital gain taxable in PA where I live?

[re2boys · Accepted solution]

The capital gains from the sale of a second home in NJ is taxable both by PA, your state of residence, and by NJ as NJ sourced income.

1.  Enter the sale of the home in TurboTax as an sale of an investment (I am assuming you did not ever use it as rental property).  You may have received a 1099S and you may have paid some NJ state income tax at closing (depending on state law).  Complete your federal return.

2.  Complete a NJ non-resident return showing the sale and capital gains resulting from the sale of NJ real estate.  Make sure, if any NJ taxes were paid, that they show on the NJ return.  Show any other NJ sourced income, if any.

3.  Complete your PA resident income tax return showing ALL income, including the NJ reported capital gains.  Be sure the PA return includes a Schedule G-L where you obtain a credit on your PA return for taxes (if any) paid to NJ ei, taxes paid to another state.  This is to avoid double taxation.

[Tax2019Pay]

Hi, I am a full year resident of NJ and owns a primary home in NJ.  I have a rental condo in PA and sold it.  Do I own income or capital gain tax in NJ or PA or both?  Thanks.