Explore the 1,000’s of tax questions answered by professionals.

Back to State Tax

QUESTION DETAIL

Related User

Votes

I have a capital loss carryover of $5,000 from the prior year. I have changed my state of residence from Colorado to Massachusetts in March 2012. As I can claim the carry over loss of $3,000 on my federal tax return against ordinary income, how do I need to adjust it to my state tax return?


ANSWER


The BIDaWIZ Team's Answer:

Typically, the $3,000 capital loss is already factored into the equation with regards to state tax returns. For instance, Colorado starts with federal taxable income which already includes the capital loss. This is true regardless of whether you were a full-time, part-time or nonresident. Massachusetts starts with federal gross income based on Form 1040, Line 22 with add backs for certain types of income, but capital gains and losses are not add backs. This means that you will also receive the benefit of the loss in the state of Massachusetts. In terms of the allocation between states since you resided in both during the year, income/loss is allocated as a whole based on your state specific income/loss and the percentage of time spent in a given state. For example, if an item is not state specific such as W-2 income, then the items are allocated based on percentage of days within a given state.

The BIDaWIZ Team

 

 

  • Currently 4.6190/5 Stars.
  • 1
  • 2
  • 3
  • 4
  • 5
1547 Ans.