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emc011075, Master Tax Adviser
Category: Capital Gains and Losses
Satisfied Customers: 3127
Experience:  Master Tax Adviser and Enrolled Agent
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I have lived in New Mexico last twelve years. Last month I

Customer Question

I have lived in New Mexico for the last twelve years. Last month I sold a farm in Tennessee.I realize that I owe federal capital gains taxes but do I owe any capital gains
taxes in New Mexico for this out of state income?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy help you.

You will claim the capital gains on both, NM and TN tax return but will get a credit for taxes you pay to TN on your NM return.

Customer: replied 1 year ago.
The family farm was sold by the family LLC. There is no individual income tax in the state of Tennessee.
Expert:  emc011075 replied 1 year ago.

What type of LLC is it? Single member, partnership or corporation?

Customer: replied 1 year ago.
Expert:  emc011075 replied 1 year ago.

A partnership is flow through entity, which means that the individual partners are responsible for partnership income reporting. Because the farm is located in TN you will need to file TN return (TN based source of income) and because you live in NM, you will need to report it in NM as well as out of state income. If you resided in NM for the entire year, you report your entire year income on your NM return. If the same income was also taxed by other state, you get the credit for taxes paid to other state.

Customer: replied 1 year ago.
Thank you
Expert:  emc011075 replied 1 year ago.

You're welcome. Is there anything else I can help you with today?

Expert:  emc011075 replied 1 year ago.

And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.