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Posted by jayhawks71 on February 7, 2008, 1:43 am
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I am hoping someone can shed some light on the following:
I used to live in Kansas and had a credit union account there. I moved
from Kansas to Missouri about 4 years ago (2004), but maintained the
credit union account in Kansas. The account earns interest (a few
hundred dollars a year). So, I have two questions: 1) Do I have to
file a tax return in Kansas for the interest? 2) If yes, would I end
up owing Kansas tax on that interest even though I claimed the
interest on my MO tax.
Thank you in advance for any knowledgeable response.
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Posted by Ira Smilovitz on February 7, 2008, 8:05 am
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Unless there is something peculiar about KS tax law, the general rule is
that income derived from intangible assets (stocks, bonds, bank accounts,
etc.,) have no "source" state. States generally tax their residents on all
income, regardless of source, and tax nonresidents on income with a source
within that state (real property, business operations, personal services,
etc.).
Some pairs of states have tax agreements that alter this general rule. If KS
and MO are such a pair, it should be obvious in the instructions for
preparing the state returns.
Ira Smilovitz
>I am hoping someone can shed some light on the following:
>
> I used to live in Kansas and had a credit union account there. I moved
> from Kansas to Missouri about 4 years ago (2004), but maintained the
> credit union account in Kansas. The account earns interest (a few
> hundred dollars a year). So, I have two questions: 1) Do I have to
> file a tax return in Kansas for the interest? 2) If yes, would I end
> up owing Kansas tax on that interest even though I claimed the
> interest on my MO tax.
>
> Thank you in advance for any knowledgeable response.
>
> --
> << ------------------------------------------------------- >>
> << The foregoing was not intended or written to be used, >>
> << nor can it used, for the purpose of avoiding penalties >>
> << that may be imposed upon the taxpayer. >>
> << >>
> << The Charter and the Guidelines for submitting posts >>
> << to this newsgroup as well as our anti-spamming policy >>
> << are at www.asktax.org. >>
> << Copyright (2007) - All rights reserved. >>
> << ------------------------------------------------------- >>
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Paul Thomas, CPA on February 7, 2008, 8:07 am
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> I used to live in Kansas and had a credit union account there. I moved
> from Kansas to Missouri about 4 years ago (2004), but maintained the
> credit union account in Kansas. The account earns interest (a few
> hundred dollars a year). So, I have two questions: 1) Do I have to
> file a tax return in Kansas for the interest?
Nope.
It is taxable to Missouri though.
--
Paul A. Thomas, CPA
Athens, Georgia
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Katie on February 7, 2008, 3:36 pm
Please log in for more thread options > I am hoping someone can shed some light on the following:
>
> I used to live in Kansas and had a credit union account there. I moved
> from Kansas to Missouri about 4 years ago (2004), but maintained the
> credit union account in Kansas. The account earns interest (a few
> hundred dollars a year). So, I have two questions: 1) Do I have to
> file a tax return in Kansas for the interest? 2) If yes, would I end
> up owing Kansas tax on that interest even though I claimed the
> interest on my MO tax.
>
Under Kansas law, a nonresident is subject to tax on income from
intangibles (such as bank accounts) only to the extent that the
intangible is employed in a business, trade or profession in Kansas.
Kan. Stat. Ann. §79-32,109(h)(8) . Some states describe this
distinction as a "business situs" of the intangible.
Income from a personal bank account, not an asset of a trade or
business, generally is considered to have its source at the residence
of the owner. You do not have a filing requirement or any source
income in Kansas from this account.
Katie in San Diego
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by jayhawks71 on April 2, 2008, 6:05 pm
Please log in for more thread options To follow up on my post that began this thread, I spoke with Kansas
today and they INSIST that the interest earned on a credit union
account is "Kansas source" because it "was from Kansas." I even tried
to get the supervisor to explain to me what the following, which is in
the Kansas tax booklet, means. However, for whatever reason she could
not find what I was referring to in spite of giving an exact page
number.
"Income received by a nonresident from Kansas sources es NOT
include:
Income from annuities, interest, dividends, or gains from
the sale or exchange of intangible property (such as bank
accounts, stocks or bonds) unless earned by a business,
trade, profession or occupation carried on in Kansas."
Any suggestions regarding how to resolve or escalate this issue? The
amount of tax due is small, but the more important issue is that I
want to know FOR SURE whether I need to file a Kansas return as long
as I have a bank account in that state!!! I appreciate the responses
thus far. I am hoping that someone could offer a suggestion regarding
how to proceed further. Thank you.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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