Zero percent Capital Gain

[Naveen Mohan from New York]

I have a client. His annual taxable income is zero because of his family size. He has sold a property in Pakistan and according to worldwide income rule, he has to include in his 1040. It is a long term capital gain and I tried to do it on ATX Max. all capital gain transferred to line 13 of 1040 correctly. I see entry in taxable income now but tax line is blank instead of Zero.

 

My main problem is that when I did his New York State tax return, zero percent capital gain did not work and all of his income got taxed as regular income.

 

My question is Zero percent capital gain limited to Federal return only and states do not have to follow it? 

 

thanks for your help.

 

Naveen Mohan      

[Don in Upstate NY]

At least for New York, you are correct.  New York taxes capital gains as ordinary income.

[mcb39]

Wisconsin has an entirely different method of calculating capital gains.  I don't even want to go there.

[Randall]

Kentucky doesn't have the capital gains special rates either.

[cred65]

Or OH.

[Gail in Virginia]

Or VA.

[NECPA in NEBRASKA]

or NE.

[Lynn EA USTCP in Louisiana]

Nor Louisiana.  Income tax calculations start with federal AGI in Louisiana.

Lynn

[Lee B]

Oregon also starts with Federal AGI

[BulldogTom]

CA treats Cap Gain as ordinary income as well.

 

Tom

Hollister, CA

[kcjenkins]

AR does have a special cap gains tax rule, but not based on feds.  Only 70% of LT CG is taxed, all ST CG is taxed.  Tax rate is ordinary, no special rate.

[Lion EA]

CT starts with federal AGI and has no separate capital gain tax rate.