Client is a retired Rabbi. He moved from MA to NJ on Oct 31, 2022. He took his full retirement distribution in July 2022 for $70k thinking the whole thing would be called parsonage. But his parsonage expenses on his MA house Jan thru Oct only total $60k. His NJ housing expenses far exceed $10k.
On the federal return, I have no problem calling the whole $70k parsonage. But what about the MA return? The $70k distribution is allocable to MA since he lived in MA when received. But his parsonage expenses while in MA were only $60k. Must I tax the $10k difference to MA? If the additional $10k was spent on the NJ parsonage, would you count it on the MA return?