Income tax question about multi-state filing. My wife and I moved from WV to Oregon in early December 2005...

But we still owned our house in West Virginia, which did not sell until March of 2006, even though we listed it immediately upon moving. We did NOT live in WV at all in 2006, nor did we make any income, except a small profit on the sale of our house. The amount we made on the sale was well below the married couple exemption of 500,000 dollars, and we were in that house for 5 years before we moved and sold it. So, the question is: Do we need to file a 2006 state tax return for WV, given that we did not live there, nor make any income there in all of 2006 other than the profit from the house sale?

Public Comments

1. No. You only pay State income tax in the state which you resided for 2006. You'll have to declare the income you made on the house, but it will be declared in the state which you live now.
2. No, you don't. Generally, owning a home in a state does not means you incur a tax liability in that state. If your principal residence was in Oregon during 2006, you paid income taxes in Oregon, your voter registration and driver's license was in Oregon, etc. you will be considered a full year resident of Oregon and a full year nonresident of West Virginia. So you will only owe West Virginia taxes only if you earned income in West Virginia.
3. I am going to say yes. Why? You sold real estate in the state in 2006. In my youth I did tax returns for people who left a state selling their principal residence. Since they left the state, while the feds would defer the gain, the state would not and said fully taxable. I think you will get a WV real estate 1099 and they will want you to file. You may not owe but I would check to see what WV does on the gain from selling a principal residence AND the seller has left the state.
4. The $500,000 exemption from tax on your house sale is for federal. If WV taxes property sales, then yes, you'd have to file a return there for 2006.