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Capital gains on private company from a different state

Forum|Forum|5 years ago
July 6, 2020
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My wife and I sold shares in a private company that is incorporated in Iowa, but we are full time residents of Arizona. Is the capital gains considered Iowa income? We did receive a 1099-B for this sale. We also have shares in an LLC in Iowa that issued a K-1 and an Iowa specific K-1, so we do have some Iowa income and I believe have to file an Iowa state tax return, but the question is whether the capital gains has to be included as "Iowa-Source Income" on form 2019 IA 126.

Best answer by DavidS127

The Iowa rule is that nonresidents report sales of real or tangible personal property if the property was located in Iowa at the time of the sale, and intangible personal property if the taxpayer's commercial domicile is in Iowa.

Your stock in a company is intangible personal property, so you do not report the capital gain in Iowa, because you are not domiciled there.

DavidS127Answer

The Iowa rule is that nonresidents report sales of real or tangible personal property if the property was located in Iowa at the time of the sale, and intangible personal property if the taxpayer's commercial domicile is in Iowa.

Your stock in a company is intangible personal property, so you do not report the capital gain in Iowa, because you are not domiciled there.

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