Pt Yr MI / WI Resident

[ajuroff]

Clients are part year residents of WI (until June 07) and part year MI residents (July - Dec 07) They sold their home in WI and moved

to MI where they purchased a new home. I am trying to figure the MI 1040CR and am wondering....

Line 16 - must include gains realized on the sale of residence regardless of age or whether or not these gains are exempt from federal income tax. Clients took the Section 121 exclusion on the sale of the home in WI. Does this excluded gain need to be included on the Michigan credit form? I was thinking no - they sold the home and moved to Michigan. Exclusion amount is automatically included on the 1040CR. Do I just override to remove this? Or am I not thinking correctly?

[LindaB]

Does the Sch. NR separate out the MI and WI parts of income, and only include the MI part on the 1040CR? Instructions say for part-year residents to only include income received as a MI resident in household income. If you are only including the MI parts of income, I would take out the gain from the sale of the WI house. And make sure they lived in MI a full 6 months to get the credit.

[ajuroff]

Hi Linda-

Yes, the Sch. NR does separate out the WI and MI income, but the exclusion from the home sale is still carrying over to the 1040CR. I did the "override" and took out the sale of the home on the 1040CR.

Thanks for your response!