Capital Gains and Losses
Questions and comments about tax rules for buying and selling stocks, mutual funds, real estate and other assets.
capitol gains for multiple state
Posted by: damitdeno, January 10, 2017 06:16AM
I have lived in my primary residence a year. when I sell in in next couple of months I will only make very little money. (long term CG).The state of WV requires 2.5% tax at closing on the gain for non residence. I will report the small gain on my federal income taxes as income. Will the state of SC where I reside now require me to pay capitol gains (long term) to them as well.

1. is this information correct.
2. will I owe sc cg taxes as well.
3. does the IRS requires cg taxes for a married couple residing in the home and possession for less than 10k? Always thought capitol gains was for large amounts of money?

please advise on all.

Re: capitol gains for multiple state
Posted by: ruth, January 10, 2017 10:21PM
1. WV will tax the gain because the property is located in WV. This rule applies regardless of whether tax is withheld from the gain.
2. SC will not tax the gain. SC allows a subtraction for gains from real property located outside SC.
3. All amounts of capital gain (e.g., $50, $1,000,000) are taxed unless there is a rule that allows you to exclude all or part of it.

Re: capitol gains for multiple state
Posted by: Drewremedy, January 10, 2017 11:27PM
That's not how I read the rules....revisit them ? I saw it as 6.5% of estimated LT gain or 2.5% of gross and a long list of exclusions ?? And after all expenses are deducted, the LT gain may be close to zero?

Re: capitol gains for multiple state
Posted by: ruth, January 11, 2017 03:13AM

Here's what I found.

Instructions for lines 7 and 8, SC Sch. NR

Gains or losses from the sale of real property (such as land or buildings) LOCATED IN SOUTH CAROLINA (emphasis mine, not shouting, couldn't use italics) must be reported in Column B.

This is consistent with the instructions for subtractions for SC residents (line h on page 3 of the SC Form 1040 instructions):


If you have income from out-of-state rental property; a business located outside South Carolina; or GAIN FROM REAL PROPERTY LOCATED OUT OF STATE (again, not shouting), as reported on your federal return, enter this amount on this line and check the appropriate box.

Re: capitol gains for multiple state
Posted by: Drewremedy, January 11, 2017 01:53PM
NOte ,we don't know why you moved or how far ...there are a number of federal exceptions and the LT gain (if any)on sale of your primary WV residence might not be taxable ...and I think states follow the federal exclusions.

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