A.G. Kalman wrote:
- quote -

Obviously my remembrance of the event was faulty as the
taxpayer hired a NY auctioneer to sell the painting.

--
Alan
http://taxtopics.net

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The painting was a Modigliani that the taxpayers had owned
and displayed in their NYC co-op apartment for 11 years.
They moved to South Carolina in 1997 but still owned the NY
apartment, which was listed for sale with Sotheby's real
estate subsidiary. They never made any arrangements to move
the painting to their SC home. The taxpayers consigned the
painting to Sotheby's for auction sale. The only time the
painting was outside NY was a three-week period prior to the
sale, during which Sotheby's displayed it at several
galleries outside NY as part of a marketing effort.

The general rule, codified in the NY statute, is that income
from tangible personal property has its source at the
location of the property. No question, the location of the
property at the time of sale (and for 11 years previously,
with the sole exception of the 3-week marketing tour) was
NY.

The only unusual thing about this case is that the
Administrative Law Judge bought into the taxpayer's argument
that the painting had somehow lost its connection to NY when
it was on the road for three weeks in a marketing campaign,
and therefore had insufficient nexus to NY to generate NY
source income at the time of sale. The DTA made short
shrift of that argument, as indeed it should.

The case does raise the question of the source of income
from tangible personal property that is owned by a
nonresident and consigned to a NY auction house or dealer
for sale. Maybe the ALJ didn't want to take the position
that the mere sale of the property by a NY auction house
would create NY source income. That would certainly open a
can of worms for Sotheby's, Christie's, etc.

Katie in San Diego

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- quote -

The painting WAS in NY when it was sold, but that was not
conclusive by itself. The court also considered the amount
of time it had been in NY prior to the sale. Here is a
link to the article in CCH Tax News.

http://tax.cchgroup.com/news/headlin...nws91205.htm#2

Bob Sandler

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Katie wrote:

- quote -

Absolutely not in NY. The taxpayer was no longer domiciled
or a resident of NY and the painting was no longer in NY.
Ittleson, New York Division of Tax Appeals, Tax Appeals
Tribunal, DTA No. 819283, August 25, 2005 , =B6405-194

Other References:
NY St. Tax Rep. at =B615-750

I read about it in the 9/12/05 CCH Tax News. It may still
be available, so I have copied you on this before it
disappears.
http://tax.cchgroup.com/news/headlin...5/nws91205.htm

--
Alan
http://taxtopics.net

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- quote -

The painting was in NY, sold by people who had recently
moved out of NY, by an auction house in NY. The painting
itself had never left NY.

Seth

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Oh, my gosh. I'll have to look that one up! Are you sure
the painting wasn't in NY when it was sold?

Katie

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Katie wrote:
- quote -

On a related subject, Katie: I don't have the citation but
one of the New York state courts just ruled that the sale of
a painting (artwork) by a taxpayer who was no longer
domiciled or a resident of NY was taxable by NY based on the
number of years the painting was hanging on the taxpayer's
wall while a resident of NY. Whew....

--
Alan
http://taxtopics.net

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Katie wrote:
- quote -

On a related subject, Katie: I don't have the citation but
one of the New York state courts just ruled that the sale of
a painting (artwork) by a taxpayer who was no longer
domiciled or a resident of NY was taxable by NY based on the
number of years the painting was hanging on the taxpayer's
wall while a resident of NY. Whew....

--
Alan
http://taxtopics.net

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John Baker wrote:

- quote -

No. A federal statute (4 USC Sec. 114, HR 394 (1996))
forbids states from taxing certain retirement income,
including IRA distributions, received by nonresidents, on a
source basis. Although you may have earned the income you
contributed to the IRA by performing services in
Massachusetts, which would make the distribution Mass source
income, Mass cannot tax it after you become a nonresident.

- quote -

Yes. Income from intangibles (e.g., stocks, bonds, mutual
fund shares) has its source at the residence of the owner.
Gains on sales of such property are sourced at the place
where the taxpayer resided at the date of sale.

Gains from any sales made before you moved to NH would be
taxable in MA.

Katie in San Diego

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I moved lock stock and barrel (except for my house which is
on the market) from Massachusetts to New Hampshire in August
this year.

My questions are:

1. IRA Sale

I have to cash in a certain amount each year on my IRA (I am
over 65).Since this year I am cashing out the required
amount AFTER I moved my legal residence to NH, do I have to
report the same (and pay tax) in Mass.

2. Stock/Mutual Fund sales

Can I omit sales of stocks and mutual funds from my Mass Tax
return if they took place AFTER I moved to NH?

Answers to these questions would be very helpful..
Thank you

John Baker

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