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tanatech
Returning Member

Wrong taxes for non-residents of MA on capital gains

I am not a resident of MA, but I have to file a non-resident tax form there for my MA source income. 

 

I have capital gains reported on Federal form 6781 which were NOT earned in MA.

These are reported on Federal Sch D Part 1 line 4 (short term) and Sch D Part II Line  11 (long term)

 

Walking through the MA state interview, there is never any option to mark these 6781 derived Federal capital gains as NON_MA_SOURCE. So, they are taxed on the MA non-resident state return as taxable income.

 

Turbotax: How do I mark these entries, both short and long term cap gains,  from form 6781 as NON-MA in my state return???

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3 Replies
MaryK4
Expert Alumni

Wrong taxes for non-residents of MA on capital gains

The Massachusetts nonresident income is indicated on the Form 1-NR/PY.  

 

The Massachusetts taxable income of a part nonresident individual is calculated as if all income were earned in Massachusetts.  The Federal Adjusted Gross Income (AGI) will be adjusted using the Massachusetts adjustments to arrive at AGI from all sources. The AGI from all sources is used to determine the taxable income. After the taxable income is calculated, it is prorated using a percentage of the AGI from Massachusetts sources divided by the AGI from all sources. This prorated tax is the Massachusetts tax.

 

 

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tanatech
Returning Member

Wrong taxes for non-residents of MA on capital gains

This answer is too generic to be useful.

 

Please, is there any way to get a specific answer regarding the specific entries / screens in Turbotax Deluxe, where I can mark Short and Long Term gains report on IRS Federal Schedule D Part 1 line 4 (short term) and IRS Schedule D Part II Line 11 (long term).

 

These two entries are included in our non-resident return as MA SOURCE income, and we cannot find a way to mark them as NON-MA SOURCE income.

CatinaT1
Expert Alumni

Wrong taxes for non-residents of MA on capital gains

What MaryK4 said was completely correct. You can confirm here: Personal Income Tax for Nonresidents

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