[senior.sherman]

I have a question regarding my 2008 taxes over which I am being audited by the state of UT.

SITUATION:

I moved from New Mexico (NM) to Utah (UT) in 2008. In NM I was self-employed & owned two homes, one I lived in & the other to house my retired Mother. I accepted a job (as an employee) in UT, sold both homes in NM & bought a home in UT. I filed a return for 2008 with the state of NM, the state of UT & federally, claiming self-employment income, W-2 income & capital gains.

In 2010 my 2008 return I was audited by the IRS. The audit resulted in adjustments to decrease my self-employment deduction & increase my capital gains, both of which increased by Adjusted Gross Income (AGI).

This year I received an audit request from the state of UT concerning my 2008 state return addressing the fact that my AGI increased after the IRS audit.

MY QUESTIONS:

1. In theory, would it not be true that I should not owe any additional taxes to the state of UT when the only adjustments to my AGI were a result of business income I earned in the state of NM & capital gains I owned as a result of a sale of property in NM? I accurately reported employment income earned in & paid taxes to the state of UT.

2. Have I been taxed twice for the same income? In reviewing my state filings to NM & UT, which I completed on Turbo Tax, I noticed that both states based my tax due on the AGI determined on my 1040. I paid tax to both states based on the 1040 AGI, which included income from both states. Should it not be that I pay taxes to NM for the business income I earned in NM less deductions & plus capital gains earned from the sale of my homes in NM & taxes to UT for the employment income I earned in UT?

[AK lawyer]

... MY QUESTIONS:

1. In theory, would it not be true that I should not owe any additional taxes to the state of UT when the only adjustments to my AGI were a result of business income I earned in the state of NM & capital gains I owned as a result of a sale of property in NM? I accurately reported employment income earned in & paid taxes to the state of UT.

2. Have I been taxed twice for the same income? In reviewing my state filings to NM & UT, which I completed on Turbo Tax, I noticed that both states based my tax due on the AGI determined on my 1040. I paid tax to both states based on the 1040 AGI, which included income from both states. Should it not be that I pay taxes to NM for the business income I earned in NM less deductions & plus capital gains earned from the sale of my homes in NM & taxes to UT for the employment income I earned in UT?

You seem to be suggesting that Turbo Tax's software was responsible for an incorrect Utah tax return. I suggest that you take that question up with Turbo Tax. I believe they are obligated to defend you in a tax audit, aren't they?

But no, assuming TT's calculations are correct, I believe the State of Utah can get away with taxing you based upon the 1040 AGI.

[EGRUNDY17]

I'm being audit on my 2009 tax return in which I reported having a medical savings account credit, in reality it was a medical trust account. The tax commission says I have to repay the total amount which I reported. Is this the case or should my taxes be refigured and I pay the difference?

[AK lawyer]

...The tax commission says I have to repay the total amount which I reported. Is this the case or should my taxes be refigured and I pay the difference?

You really shouldn't start a new question on an old thread. Is this a Utah state audit?

Are you sure that you are understanding what the commissioner is telling you? I agree; It seems as though it should be the difference.