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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29646
Experience:  Taxes, Immigration, Labor Relations
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Please explain: if Im non resident NJ, but I had and sold

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Please explain: if I'm non resident NJ, but I had and sold a business in NJ in 2011 by installment payments. I continue to get payments for it. Should I pay NJ tax for 2012 for Installment sale income or not?

Lev :

Hi and welcome to our site!
Because the original sale was income from NJ sourced - the gain is taxable for NJ regardless if paid in full amount or installment.
However interest you will pay on installment sale will not be taxable for NJ if you become a nonresident of NJ.

Lev :

Gains from installment sales must be reported in the same year that you report them on your Federal return.
Subsequent to the commencement of the installment sales contract the non-resident seller must pay income tax on all payments received during the taxable year from the buyer when the seller files his/her non-resident income tax returns.

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