I am working on 2021 estimated taxes for a client.
Client moved from DC to PA in March 2021. DC Home sold in April 2021, while she was a resident of PA. The home has a gain even after the $250k exclusion is applied. For 2021, she will have a PY DC and PY PA return. DC does not have a nonresident return.
I copied her 2020 return into a practice return and entered the home sale so I could more accurately do estimates across the two states. Filled out both the PY and NR allocation worksheets. Home sale is during PA residency but from a DC source.
No gain is showing up on either the DC or PA returns. It seems DC would tax this nonresident capital gains from a DC source and then I would take a credit on PA return. Suggestions?