Question

Do I owe North Carolina tax on the sale of my principal residence even though I do not owe federal tax on the sale?

Forum|Forum|3 years ago
February 25, 2023
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TurboTax Deluxe Online

No, if the gain on the sale of your principle home was excluded from federal taxable income due to living in and owning the home for two of the last five years prior to the sale, then that gain is also excluded from NC taxable income.

This happens automatically in TurboTax. NC begins with the Federal Adjusted Gross Income. Since the gain is excluded from Federal Adjusted Gross income, it is not in NC taxable income.

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