A Hawaii tax question

[TaxGal]

I hope you are all doing well and surviving tax season!

I have a taxpayer who moved out of Hawaii mid-year and set up residency in another state. A few months later, taxpayer sold the stock of his closely held corporation which was located in Hawaii. Would the sale of the stock be considered non-Hawaii source income on his return if he files as a Hawaii part-year resident?

[jainen]

Capital gains and losses

Capital gains and losses from the sale of stock are generally considered to be intangibles which are sourced to the state of residence. I suppose there might be some facts and circumstances about what exactly was represented by the stock in a closely-held corporation, but I wouldn't get into that unless the taxing agency forced the issue.

[JCH]

I would source it to the state of residency at the time of sale. Unless there is some withholding tax issue from Hawaii related to the stock sale, I wouldn't worry about Hawaii considering it their state income.

[taxea]

A Hawaii Tax Question

"a closely held Hawaii company" doesn't that mean the company has to file a Hawaii return? If the company is in Hawaii that means the stock is in Hawaii and they will want their share of the taxes. taxea/HAWAII