Question

Capital gains from US Obligations - MD tax form

Forum|Forum|2 years ago
March 16, 2024
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I have capital gains from US obligations (as identified in the supplemental information on my 1099-div), and I do not see where they are to be entered in turbotax ( Desktop Premier on a Mac) for my Maryland return. As I understand it, they should not be taxed by Maryland.

I also have dividends from US Obligations which were entered with the Federal return to be used on the state return. When I open MD 502SU, I see an "Income form US Obligations Smart Worksheet" with lines A, B and C.

Line A correctly contains the amount of dividends from US obligations.

Line B which is supposed to be "Capital gains from the sale or exchange of US govt obligations" doesn't have anything in it.

I have gone back through the federal and state form questions, and I am not seeing where I should be entering this information. (Other than either entering it along with the dividends)

Where is this information supposed to be entered?

Thanks.

AmyC

I think you are saying that all of your capital gains came from a fund. Since the capital gains came from a fund, those are part of the dividends and not a separate sale.

You did not sell any bonds that you own personally. You don't have a sch D with sale of obligations so you don't have capital gains separately. You would not have an entry for the capital gains line since it is included with the fund information - already a part of the DIV.

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K

KWR1Author

Actually,. I have a fund I'll call ABCDE. Rounding numbers, ABCDE paid dividends of $500.00. ABCDE also had a capital gains distribution of $400.00. This $400.00 is not a part of the dividends. My understanding is that MD does not tax either the dividends or the capital gains that were from US obligations.

Since 5.4% of the fund is US obligations, my understanding is that I take 5.4% of the dividends of $500 as a subtraction on the MD tax form, and that I can also take 5.4% of the capital gains of $400.00 as a subtraction on the MD tax form. I was asked in turbotax about the dividends, but I was not asked separately about the capital gains.

So, I am not sure if my understanding is wrong or if I missed the place that I should be entering the capital gains information.

DMarkM1

MD does exclude the capital gains on US obligations.

After entering a form 1099-DIV with amounts in boxes 1A and 2A
You will find a follow on page to indicate that some/all of the dividends are from US obligations
Check the box
You will be asked what amount of the dividends in box 1A are from US obligations
Enter your calculated number, 5.4% of box 1A, for example
Continue to the MD state interview
"Edit" the "Income" section
You will see the "Interest from US obligations" topic
Edit that topic
You will arrive at a page asking about the capital gains on US obligations.
You can enter your calculated number, again 5.4% of box 2a, for example