Question

Out of state rental with no rental income & any deductions?

Forum|Forum|5 years ago
February 22, 2021
1 reply
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If someone buys an out of state rental property in October 2020 but didn't rent it out in 2020 (no rental income October-December), does he/she need to file taxes in that particular state?

Also, can one claim any deductions or depreciation using 1098 for the out of state rental property?

Deduction

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PattiF

One does not need to file taxes in the other state at this time. When the house is rented, then a return should be filed in the other state.

You would be able to claim some deductions for the property as a second home.

Some things you could deduct on your 2020 return would be the property taxes that you paid, and the mortgage interest (if any) as long as you are not already deducting interest for more than one home. Since it is not yet being rented, it can be considered your second home for 2020.

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pandaMTAuthor

Thank you - this was super helpful to claim it as a second home! If I paid $40 to download an additional state, can I get a refund since I don't need to file a tax return for the out of state home any more?