Solved

Sale of house in the State of Colorado

Forum|Forum|3 years ago
February 14, 2023
1 reply
0 views

My wife & I have always lived in New York State. In 2013 I purchased a house in Denver, Colorado. My Daughter & her family lived there until I sold the house in Oct. 2022. I will owe capital gain taxes on my federal tax return. My questions are as follows:

1) Will I need to file New York State & Colorado tax returns

2) Which state would receive the capital gain taxes

Thanks

Best answer by AmyC

1. Yes. CO income requires a CO return. See DR 0104 Book.

2. CO receives the tax. NY will give you a credit for the lower of CO or NY tax on the same income. You must prepare the CO return before NY to calculate the tax correctly. See How do I file a nonresident state return?

AmyCAnswer

Employee

1. Yes. CO income requires a CO return. See DR 0104 Book.

2. CO receives the tax. NY will give you a credit for the lower of CO or NY tax on the same income. You must prepare the CO return before NY to calculate the tax correctly. See How do I file a nonresident state return?

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

S

SCTax70Author

Amy Thanks. I already completed the NYS tax return & then I did the Colorado 104 Non-Resident state tax return thru Turbo Tax. It appears that the two states share the taxes due. Is this correct? Why does NYS receive some of the Capital gains due on a house sold in Colorado?

Thanks

T

ThomasM125

New York first taxes all of your income, then reduces the tax by a percentage which is calculated by factoring in the income earned out of state versus your total income. So when you look at the New York return, it appears that they are taxing your income earned out of state. Since they don't give you a dollar for dollar reduction for your out of state income tax, it is possible that there will be some double tax of out of state income.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"