Question

How does north carolina treats federal capital loss carryovers?

Forum|Forum|1 year ago
May 25, 2024
2 replies
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I moved to North Carolina in 2023 and have $22,000 in capital gain. On my federal return, I have capital loss carryover from 2022 for the amount of $13,000. My federal taxable capital gain is $7,000. Can I also apply the capital loss carryover to my NC return?

fanfare

The software will apply carryovers, if allowed by your state.

@amecal

fanfare

If you moved to NC in 2023, it would seem you have no state of NC carryovers, regardless.

Caution: I'm no NC state tax expert.

N

NCPERSON1

NC calculates its tax based on federal Form 1040 Line 11..... so as you apply the carryover on your federal taxes, it has the same affect on the NC taxes - there is nothing special you have to do for NC.

you are only paying taxes in NC on your capital gains, which are part of Line 11 already

A

amecalAuthor

You are right but I guess I didn't phrase the question correctly. I wanted to know about Schedule PN Column A and Column B for part-year residents.

I believe I got the explanation I was looking for and I am sharing it with you all:

For North Carolina individual income taxes, federal capital loss carryovers are not recognized. You should include all capital losses in the year of disposition. Therefore, you don't need to adjust Column A or Column B on Schedule PN. Column A reflects total income including federal capital loss carryovers, while Column B includes only North Carolina-sourced income regardless of the Federal Capital Loss carryover.

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amecalAuthor

can you please reference a link documenting the source of your information. Your explanation is not how the instructions read.

thank you.

I dont see any contradictions to what you said.

My concern was that Column B was greater than Column A, resulting in 1.05 Part-Year Resident percentage (line 24, sched PN).

Bottom line, I wanted to know if it was possible/correct to adjust the amount of Column A line 7 (federal capital gain) to match line 7 Column B (NC capital gain) and I hope I got the correct answer: No adjustments are allowed in Column A, line 7. And in general, I understand that lines 1 to 15 are populated by Intuit and no overrides or adjustments are allowed.

Everything else in Columns A and B looks correct and I was expecting to get a 1 in the percentage because income earned while non residents of NC was foreign income and we are claiming the FEIE. As a result, all federal income remaining after the FEIE, is earned in NC