Client owns rental property in Missouri and sold one property with a large capital gains in 12/05. He did not live in MO. He lived two months in New Mexico and the rest of the year in Arizona. The only other income besides the cap gains that he had was 7,000 in wages from New Mexico. Does he need to file in MO as NR? I'm not sure he'll need to file in New Mexico due to the low wages. If he pays MO tax, does he need to file in AZ as a resident? He shouldn't have to pay state cap. gains twice.
-
-
You are going to have to determine first which state the taxpayer was domiciled. What is the taxpayer’s history? Did he live, vote, have a driver’s license in NM for years before moving to AZ?
If his domicile was NM for years, and then he moves to AZ and establishes a new domicile in AZ, then you have a part year NM and a part year AZ return to file.
MO is obviously a NR return since he never lived in MO. If tax is paid to MO as a NR, then either NM or AZ or both will probably offer some kind of credit for state tax paid to another state.
Comment