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February 28, 2025
Question

PA capital gains tax

  • February 28, 2025
  • 1 reply
  • 0 views

Turbo Tax did not reduce a mutual fund capital gain distribution by the long term loss of a stock sale on PA return.  The stock sale loss WAS reduced from the same mutual fund distribution in calculating net capital gains on Turbo Tax Federal return.  I don't get the logic if Turbo Tax reporting is correct.  

    1 reply

    March 5, 2025

    It depends. If the mutual fund capital gain distribution is from your dividends (1099-DIV), then Pennsylvania (PA) does not recognize this category of income the same as a sale of stock. TurboTax is reporting this correctly, see the information below.

     

    On your PA return they do not allow a loss from one class of income to offset any income from another class of income

     

    Income Classes on PA-40:

    1. Wages
    2. Interest
    3. Dividends and Capital Gain Distributions
    4. Business or Farm
    5. Net Gain or Loss from Sale, Exchange or Disposition of Property
    6. Rents, Royalties, etc
    7. And others...
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