New York and/or Massachusetts income tax?


T

Toller

I am in NYS.
My son graduated college in June, stayed in Massachusetts, and got a
series of temp jobs from July on.
He will have investment income throughout the year.
Presumably he has to file state tax returns in both NY and MA, with
all the earned income going into MA.
But how do I split the investment income?
Can I claim him as a dependent, as he worked less than 6 months?
He is still on my medical insurance. Do I deduct his medical
expenses, or does he?
The past several years he accumulated some significant capital
losses. Will any he can't use in NY in 2010 just be lost at the state
level?

This seems like a pretty common, yet complicated issue; is it
explained anywhere?
Thanks.
 
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T

Toller

A bit additional...

Although he intends to reside in Massachusetts permanently, he still
has a NYS drivers license, etc.
His investment income is just from stocks and bonds; nothing tied to
either state.
 
T

Tempuser

A bit additional...

Although he intends to reside in Massachusetts permanently, he still
has a NYS drivers license, etc.
His investment income is just from stocks and bonds; nothing tied to
either state.
Way too much information missing to answer your query. It is possible
that he was a MA resident for the whole year or for part of the year. It
is possible that he was a NY resident for part of the year but probably
not the whole year. He could have even been treated as a resident in MA
while being a resident in NY. He may have been or may not have been your
dependent.

Exactly where did he reside from the start of the school year in Jan.
2010 until he graduated? If he resided on campus or off campus in
college owned facilities, those places would not be considered a
permanent abode under MA law. If he resided off campus in non-college
owned quarters, that would be a permanent abode and it would appear that
MA would consider him a state resident. Once school ended and he stayed
in non-college quarters, he would be in a permanent abode and as the
days in state appear to exceed 183 MA would consider him a part-year
resident. It is also quite possible that while in MA he remained a NYS
resident (at least for the first part of the year) as NYS appears to
have been his domicile. Lastly it is hard to tell from the facts
presented when or if he became domiciled in MA.

As to whether or not he was your dependent in 2010 depends upon whether
he is your qualifying child or if not your or anyone else's qualifying
child, was your qualifying resident. As this subject is more than
adequately explained in IRS Pubs, please read either Pub 17 or Pub 501
for definitions of a qualifying child (QC) or qualifying relative (QR).
 
T

Toller

He lived on campus in MA until 5/17/10, lived with his girlfriend
until 6/1/10 in MA when he got his own apartment in MA.
He worked about half the time after graduation in temp jobs until he
got a long-term temp job in September.

So, I am thinking he was not a dependent as he did not live with me
more than half the year as required, even though he did not provide
more than half his support.
 
H

Han

He lived on campus in MA until 5/17/10, lived with his girlfriend
until 6/1/10 in MA when he got his own apartment in MA.
He worked about half the time after graduation in temp jobs until he
got a long-term temp job in September.

So, I am thinking he was not a dependent as he did not live with me
more than half the year as required, even though he did not provide
more than half his support.
Shouldn't he have gotten a Mass driver's license long before the end of
2010 because he lives and works in Mass? I forget whether the timeframe in
1969 (when I immigrated from Holland) was 6 weeks or 3 months.
 
A

Alan

He lived on campus in MA until 5/17/10, lived with his girlfriend
until 6/1/10 in MA when he got his own apartment in MA.
He worked about half the time after graduation in temp jobs until he
got a long-term temp job in September.

So, I am thinking he was not a dependent as he did not live with me
more than half the year as required, even though he did not provide
more than half his support.
Based only on the facts presented, it appears as though he passes the MA
test for having a permanent abode in MA and spending more than 183 days
in the state. It also appears that he probably was a part-year resident
of NY during his time spent in campus housing, as I assume he remained
domiciled in NY. If his taxable gross income for the year was at least
$3650, he could not be your qualifying relative.
 
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T

Toller

On 1/22/2011 4:29 PM, Toller wrote:> He lived on campus in MA until 5/17/10, lived with his girlfriend


Based only on the facts presented, it appears as though he passes the MA
test for having a permanent abode in MA and spending more than 183 days
in the state. It also appears that he probably was a part-year resident
of NY during his time spent in campus housing, as I assume he remained
domiciled in NY. If his taxable gross income for the year was at least
$3650, he could not be your qualifying relative.
Okay, but that's the minor part of my original post.
He had investment income throughout the year.
Assuming he has to file in NYS as a part time resident, how does he
split the investment income; proportionately by days of residency?
He is still on my medical insurance. Do I deduct his medical
expenses, or does he?
The past several years he accumulated some significant capital
losses. Will any he can't use in NY in 2010 just be lost at the state
level?
 
A

Alan

Okay, but that's the minor part of my original post.
He had investment income throughout the year.
Assuming he has to file in NYS as a part time resident, how does he
split the investment income; proportionately by days of residency?
He is still on my medical insurance. Do I deduct his medical
expenses, or does he?
The past several years he accumulated some significant capital
losses. Will any he can't use in NY in 2010 just be lost at the state
level?
Investment income is an intangible. The income belongs to the state in
which he was a resident at the time he actually earned the income. E.g.,
if he received a dividend payment on March 31 and he was a resident of
NY, then the dividend is sourced to NY.

The definition of a dependent for purposes of deducting medical expenses
is different then the definition used to claim an exemption. This is
explained in IRS Pub 502.

Assuming he accumulated the unused capital losses while a resident of NY
and he is filing a part-year NY return, he would carry those losses
forward to his NY return.
 
T

Toller

Investment income is an intangible. The income belongs to the state in
which he was a resident at the time he actually earned the income. E.g.,
if he received a dividend payment on March 31 and he was a resident of
NY, then the dividend is sourced to NY.

The definition of a dependent for purposes of deducting medical expenses
is different then the definition used to claim an exemption. This is
explained in IRS Pub 502.

Assuming he accumulated the unused capital losses while a resident of NY
and he is filing a part-year NY return, he would carry those losses
forward to his NY return.
So I have to go though the 1099s and break them up between before and
after 5/17/10? Won't be fun, but I can do that.

As I read it, he is qualifying relative for medical deductions, but I
do not get a deduction for him because he earned over $3600.

Lets say he has $50,000 in carried forward capital losses on his NYS
return, and $5,000 in capital gains before he became a MA resident.
He can offset the $5000, but then just loses the $45,000 in capital
losses; he cannot carry them forward to MA. Is that correct? Too
mad.

I appreciate your help.
 
A

Alan

So I have to go though the 1099s and break them up between before and
after 5/17/10? Won't be fun, but I can do that.

As I read it, he is qualifying relative for medical deductions, but I
do not get a deduction for him because he earned over $3600.

Lets say he has $50,000 in carried forward capital losses on his NYS
return, and $5,000 in capital gains before he became a MA resident.
He can offset the $5000, but then just loses the $45,000 in capital
losses; he cannot carry them forward to MA. Is that correct? Too
mad.

I appreciate your help.
MA capital loss carryovers would exclude any carryover that was not
reflected on a prior MA Schedule D. In other words, his unused capital
losses derived when he was a NYS resident would not be allowed on his MA
tax return.
 
S

Seth

Alan said:
MA capital loss carryovers would exclude any carryover that was not
reflected on a prior MA Schedule D. In other words, his unused capital
losses derived when he was a NYS resident would not be allowed on his MA
tax return.
Is that special to MA? I don't recall MN doing that.

If that's the case, can he use them if he later moves back to NY (even
though they're used up federally)?

Seth
 
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A

Alan

Is that special to MA? I don't recall MN doing that.

If that's the case, can he use them if he later moves back to NY (even
though they're used up federally)?

Seth
I'm not familiar with MN, but it should be fairly easy to look up. As to
NY: I don't know if NY has a time limit on capital loss carryovers. That
should also be easy to look up.
 

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