2 State Problem

[TAXMAN]

TP resident of va all year. Sold Real estate in wva for healthy profit. At this point I am not sure as to what state TP  pays and what state gets credit. WV Sch E says no nonresident credit allowed and VA says take credit on WV for tax paid to VA. Can you help me unravel this. Gain on sale was 6 figures.

[Jim Oh Bkkr]

Do you have closing documents?  I had one of these several years ago where the closing statement also listed WV state tax withheld (easy to miss and there was some kind of make-shift W/H "certificate" included with the closing docs.).  This was inherited property, so there was no gain, and the WV return was needed to get the withholding back.

At the time, I seem to remember that WV law was that W/H was required for "out of state" seller as they were entitled to the tax on the sale.  I assume VA would give credit.

Edited March 13 by Jim Oh Bkkr
clarity

[TAXMAN]

Bringing back to life. 1099'S showing property sold in WV. Will be a sizeable gain. I just need help as to which state to pay the estimate to.

[Lion EA]

Usually, WV where the money was earned. When you take a credit on your resident state return for WV taxes paid, you might be close to a wash. But if in your resident state you'll be in a much higher tax bracket, you'll need to increase your withholding or make an estimate to your resident state, also.

First check on what happened to close the sale, because you might've paid WV income tax already.

Also, I don't deal with WV, so check if it's a reciprocal state with yours, and if the reciprocity pertains to only earned income or if it might change how a property sale is taxed between the two states.

[Lion EA]

Usually, WV where the money was earned. When you take a credit on your resident state return for WV taxes paid, you might be close to a wash. But if in your resident state you'll be in a much higher tax bracket, you'll need to increase your withholding or make an estimate to your resident state, also.

First check on what happened to close the sale, because you might've paid WV income tax already.

Also, I don't deal with WV, so check if it's a reciprocal state with yours, and if the reciprocity pertains to only earned income or if it might change how a property sale is taxed between the two states.

Oops! I didn't read above the line. Jim already gave you answers.