Tax Law (Questions About Taxes)/part year residency

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Question
My husband and were longtime residents of Arizona until May 28, 2012 when we permanently moved to North Carolina.

Our income consists of an IRA RMD (distributed in Dec 2012) and his monthly social security.  The RMD is significant and (of course) taxable.  We have small amounts of dividend and interest income.  I have about $500/year self-employment income.

I believe we have to file both an AZ and a NC state return.  Is it reasonable to do the following:

1.  Since we lived in AZ for 5 of 12 months, can I report 5/12's of his SS and our dividends and interest to AZ and 7/12's to NC?

2.  Since the RMD was distributed in Dec 2012, is it reportable ONLY as NC state income?

3.  The bank account that receives the (insignificant) self employment tax still resides in AZ (as does the dba).  Can I simply report this as AZ income and not include it on our NC return?

Any other advice is most welcome.  Thank you.

thank you very much!

Answer
Jeanette,

Thanks for your question.

It's not quite that simple. You will file as a part-year resident in both states. Earned income (such as your SE income) attaches to the state where it was earned. So, in you case you need to allocate it between the two states based on when you received the income.  This will probably need to be done manually.

For the rest, it is allocated based on the days of residency in each state.  Your deductions and exemptions get the same treatment.  A good tax program does this automatically when you enter your dates of residency.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

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I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

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DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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