Capital Gains
We sold our out of state second home. Our primary residence is Arizona. The sold home was in Wisconsin. (We used it for approx. 4 months each summer) We owned home for three years. (Never renting to others) I have no income other than Soc. Sec and dividends. We did not do a 1031 (Done investing) I know we will file Fed form D 1040 and pay federal taxes on the gains. I understand cost basis, etc. My question is: Do I need to file two state returns and be taxed by both states? In past years with FreeTaxUSA I only filed AZ state tax.
Thank you for any help with this. David & Kathryn Neukom
Best Answers
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Yes, you will need to file a part year/non-resident state tax return for Wisconsin. On this return you would report the sale of the second home and pay tax on the gains. The tax you pay to Wisconsin will be a credit on your AZ tax return to avoid paying taxes twice on the same gain from the sale.
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Sorry, FreeTaxUSA
Answers
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I am hoping FeeTaxUSA will be able to provide needed forms (state returns) for another successful filing. You keep it simple!