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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11136
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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A taxpayer owns land with oil drilling rights in Tioga County,

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A taxpayer owns land with oil drilling rights in Tioga County, Pennsylvania. The land is purchased 6/30/09 & sold 7/16/12. The taxpayer is a PA resident from 6/30/09 - 5/17/12, at which time he relocates to Florida. There is a large capital gain on the sale. Is the entire capital gain reported on his PA return & subject to PA tax?

NPVAdvisor : OK, (Don't shoot the messenger here) :)
NPVAdvisor : From PA dept. of revenue:
NPVAdvisor : Part-Year Residents of Pennsylvania. Part-year residents are subject to PA personal income tax on all income earned, received and realized from all sources when residents of PA. Part-year residents are also subject to PA tax on income earned, received and realized from sources within PA when they were not a PA residents. Part-year residents are not subject to PA tax on ordinary interest, dividends, gains, intangible property or gambling and lottery winnings from PA sources while a nonresident.
NPVAdvisor : hey, I just re-read the LAST sentence ...
NPVAdvisor : Part-year residents are not subject to PA tax on ordinary interest, dividends, gains, intangible property or gambling and lottery winnings from PA sources while a nonresident.
NPVAdvisor : Looks like you're OK
NPVAdvisor : You are part year, but by 7/16/12 you were not a resident, and gains are excluded !
NPVAdvisor : See this:
NPVAdvisor : http://www.portal.state.pa.us/portal/server.pt/community/personal_income_tax/11409/nonresidents___part-year_residents_instructions/580655
NPVAdvisor : Let me know of you have questions
NPVAdvisor : Lane
Lane and 3 other Tax Specialists are ready to help you
Customer: replied 3 years ago.
Are you sure that gains include capital gains?



This is a direct quote (changed only by what I'll underline):


" Part-year residents are not subject to PA tax on ordinary interest, dividends, gains, intangible property or gambling and lottery winnings from PA sources while a nonresident."


You have them here ... any reasonable person would interpret that to say that the gain is not taxed if the gain happened while you as a part year resident were not a resident of PA anymore.


You could call to double check, but this has been published to the public and would hold up under scrutiny. I would certainly point them to this if you do.

Capital gains are gains.

Interest, dividends earned income and pension income are income.



Lane and 3 other Tax Specialists are ready to help you

Hi Scott.

One of the other types on income I didn't mention is royalty, but yes gains means capital gains.




Gains IS the more general term.




Had they specified a type of gain, that would be different.

For example, a distinction IS made between ordinary and capital gains.

But PA's literature specifies the more general gain (so even short-term gains would be included).


Positive feedback appreciated. :)

Lane

Thanks Scott ..... Again!

Let me know if I can help again.

Again, just say "For Lane Only."


Thanks much,
Lane