Does a permanent resident of NC have to report sale of a garage in PA?

Forum|Forum|2 years ago
March 26, 2024
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DawnC

Employee

Maybe. Did the sale generate a taxable gain on your federal and/or NC returns? PA Nonresidents are subject to tax only on income from Pennsylvania sources.

Since nonresidents of PA are only taxed on their Pennsylvania-source income, only transactions displaying net gains and losses on tangible property located within Pennsylvania are required to be reported on PA Schedule D. Any gain reported on a PA-20S/PA-65 Schedule NRK-1 should be and is presumed to be Pennsylvania-source income.

If the sale did result in a gain, and you are therefore required to file a nonresident PA return - complete the PA return first so that any tax you may owe to PA gets credited on your NC resident return. How to file a nonresident return

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brandtjj-hotmailAuthor

I'm a full-time resident of NC, and have the PA tax installed in my TurboTax, but I've been through the process twice, and cannot find where to enter gain from selling a 2-car garage in PA. I pulled up the PA-40-2023 return in Forms, and that shows Nonresident, Final Return, and School District Name "Not in PA", which I believe are all correct. However, as I'm going through the PA tax for the third time, I'm on a page that says "Based on your federal return, your filing status for your Pennsylvania return will be married filing jointly." rather than the 'final return' I entered. On the next page, I did click that it is the final return. On the next page, I entered "sold 2-car garage in PA". The next several pages ask about our retirement incomes, which I click on [No entry] in the State Type Code since I don't believe the drop-downs are applicable in this case. Is that incorrect? On the PA Retirement Distributions, the top line says "We see that you have at least one retirement distribution for Pennsylvania. You'll need to enter the PA required information for each distribution. The next several pages say that my entire amount of this distribution is not taxable in PA. On the Any Other Miscellaneous Compensation page, I've tried different answers there, but believe it should be no since I didn't consider a tangible property sale to be compensation. I could be wrong, so I'm stopping here to see if I'm on the right track.

CatinaT1

Final return is for someone who is deceased. You will enter the sale in the federal portion and it will carry over to the state. The sale amount will be PA source income.

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