SC taxes Losses from out-of-state rental property

Forum|Forum|1 year ago
March 28, 2025
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What the heck? How can SC TAX LOSSES from an out-of-state rental property sale??

AmyC

Employee

They don't but the way they do the computation can look odd. What are you seeing on which line of which form?

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ROG111Author

OH, they evidently can....I have a tax due invoice from them (Tax Year 2022) for $7,665 PLUS $1,251 in INTEREST!

WRT to your specific question, I can't answer it...as they only sent me a basic worksheet showing where they added my $193,345 LOSS to my SC Income subject to tax.

SusanY1

Since South Carolina taxable income starts with your federal income (Line 1 of form SC1040), any losses from out-of-state that reduced that income have to be added back to your South Carolina taxable income (Line 1b).

Those losses aren't allowed to reduce your SC taxable income. This increases the amount of income that is taxable in the state.

If you received a notice from South Carolina it may not be 100% representative of what you truly owe.

You should check this by preparing an amended return to determine if your calculations match the states after the out-of-state losses are added back in on Line 1b.

If it doesn't match, then file the amended return. If it does match, you don't have any recourse other than to pay the tax and the interest owed.

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