Should I mail past 8 years state returns to CA for rental property

Forum|Forum|1 year ago
May 10, 2024
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I live in TX and own a rental property in CA. The property has a mortgage, hence it has been generating losses for past 8 years. I do my TX and CA taxes using TT home and business every year. And the CA tax would be all Zero's. Hence I did not mail the CA tax returns for 8 years. Today I found that, we have to mail the CA tax return even if its zero, this will help with tracking accumulated losses and depreciation, and can be applied when I sell the property in the future.

What is the the best way to remediate this? Should I print the past 8 years CA tax returns and mail them to FTB in CA? Is there any problem with doing this?

Best answer by Rick19744

While you may not have any current CA tax liability from the rental property, CA has the potential for assessing a failure to file penalty, etc.

I haven't looked at this area specifically, but CA is an aggressive state.

I would recommend getting a tax professional involved, drafting a letter to see if CA would entertain waiving the penalties and you would file all unfiled tax returns. Using a tax professional, this individual can make the request anonymously to begin the conversation.

Some states announce a voluntary disclosure period of time, but it never hurts to ask the question even if the state hasn't made this publicly available.

Rick19744Answer

Employee

While you may not have any current CA tax liability from the rental property, CA has the potential for assessing a failure to file penalty, etc.

I haven't looked at this area specifically, but CA is an aggressive state.

Some states announce a voluntary disclosure period of time, but it never hurts to ask the question even if the state hasn't made this publicly available.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

nomadAuthor

Should I involve a tax professional based in CA or TX. I live in TX permanently, and manager the CA rental property remotely, but active participation.

rjs

Employee

It doesn't matter where the tax professional is located, but you need someone who is familiar with California tax law and has experience dealing with the FTB, not just preparing returns. It might be more comfortable for you if you could find someone like that near where you live, but you might be better off working remotely with a tax professional in California. Make sure the person is a CRTP (CTEC Registered Tax Preparer), or an Enrolled Agent, CPA, or attorney.