NY taxes / AL resident


V

Vic Dura

I am a 25-year resident of Alabama but own some real estate in NY
which I will likely be selling this (2008) year. Do I have to file a
NY non-resident tax return (IT-203??) to report any gain, or do I just
report it in AL?

If I have to report in both NY and AL,
do I try to get credit in AL for the NY tax paid OR
do I try to get credit in NY for the AL tax paid?

Thanks
 
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P

Phil Marti

Vic Dura said:
I am a 25-year resident of Alabama but own some real estate in NY
which I will likely be selling this (2008) year. Do I have to file a
NY non-resident tax return (IT-203??) to report any gain, or do I just
report it in AL?
You will definitely have to file a NY return and pay NY tax on the gain.
You will probably also have to include the income in your AL income, but
check the AL instructions.
If I have to report in both NY and AL,
do I try to get credit in AL for the NY tax paid OR
do I try to get credit in NY for the AL tax paid?
Usually the residence state offers some sort of credit paid to another
state. Again, look to the AL instructions.
 
K

Katie

I am a 25-year resident of Alabama but own some real estate in NY
which I will likely be selling this (2008) year. Do I have to file a
NY non-resident tax return (IT-203??) to report any gain, or do I just
report it in AL?

If I have to report in both NY and AL,
do I try to get credit in AL for the NY tax paid  OR
do I try to get credit in NY for the AL tax paid?

Yes, you must file a NY return to report and pay tax on the gain.
IT-203 is the form.

Alabama will give you credit for the tax you pay to NY; see Form 40,
Schedule CR. However, the credit will be limited to the proportion of
your Alabama tax liability that relates to that income. Since it is
likely that the NY tax rate will be higher than the AL rate, you may
not get credit for all of the tax you pay to NY. Net, you will pay
state income tax on that income at the higher of the two states'
average rates for your income level, filing status, number of
dependents, etc.

Katie in San Diego
 
H

Harlan Lunsford

Katie said:
Yes, you must file a NY return to report and pay tax on the gain.
IT-203 is the form.

Alabama will give you credit for the tax you pay to NY; see Form 40,
Schedule CR. However, the credit will be limited to the proportion of
your Alabama tax liability that relates to that income. Since it is
likely that the NY tax rate will be higher than the AL rate, you may
not get credit for all of the tax you pay to NY. Net, you will pay
state income tax on that income at the higher of the two states'
average rates for your income level, filing status, number of
dependents, etc.

Katie in San Diego
Katie, even though we don't have any numbers to work with here, I dare
say that he'll come out okay on the Alabama return.
Just a hunch based on 35 years of doing Alabama form40's. (grin

ChEAr$$$,
Harlan Lunsford, EA n LA
 
K

Katie

Katie, even though we don't have any numbers to work with here, I dare
say that he'll come out okay on the Alabama return.
Just a hunch based on 35 years of doing Alabama form40's.  (grin

ChEAr$$$,
Harlan Lunsford, EA n LA

Well, I would expect the average rate in Alabama (2% to 5%, right?) to
be lower than the average rate in NY (4% to 6.85%), but of course
there are other variables that could change the result. I just like
to warn people that they may not get every dollar of source state tax
back from the residence state, so they don't get surprised.

Katie
 
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V

Vic Dura

Thanks to all who replied, particularly to Katie for pointing me to AL
Sch-CR.

Regards
 
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