Skip to main content
March 13, 2023
Question

Allocation of rental income and losses in a non-resident state when lits passive oss carryover offsets the income from different state

  • March 13, 2023
  • 1 reply
  • 0 views

I have rental properties across state with income and losses, and some of them with paasive loss carryovers from previous years.

 

I understand in federal rental income, losses for any properties can offset other rental gains but nonresident states only use rental losses for properties in the nonresident state to offset rental gains in their state.    

 

But what about the passive carryover losses from one state used to offset different state's income? How do I calculate loss for a state when its deductible loss carryover offsets another state's income.

Should it be added as is ??

 

For example, considering two prpoperties in State A ,and one property in State B :

Both states are files as non-resident. 

 

 state A property1state A property2state B property1
Rents minus expenses (line 21 from SchdE)1000600010000
Deductibe real estate loss (line 22 from SchdE)-12000-60000

 

Fedral rental income would look like :

 

Income (line 24)17000
Losses (line 25)-18000
Total income or Loss (line 26)-1000

 

 

But for State A is the caluclation below correct ???

 

Income (line 24)7000
Losses (line 25)-18000 ???
Total income or Loss (line 26)-11000 ???

 

Thanks for your help!

    1 reply

    March 14, 2023

    Each state has its own rules on the application.  Can you clarify the state?  

    nirbheeAuthor
    March 14, 2023

    Property1 in the example above is in north Carolina, property 2 is in west virgina.

     

    Thanks!

    March 15, 2023

    If you look at the screen shots (below) both West Virginia and North Carolina look at the total federal amount then the state amount.  Because you can identify which loss apply to the specific property, you would want to net them individually.  Like I said this is state specific but this is the method used mist often, but there are state that allow the loss pro rata.  @nirbhee