Discussion:Rental losses - non resident
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Discussion Forum Index --> Tax Questions --> Rental losses - non resident
| 28 May 2008 | |
| I have a client who is a resident of Maryland but has rental property in NY. This rental property generates a loss. It makes sense to me to be able to take the loss in NY against NY income (he has none so there is a suspended loss), but it does not seem like I should be able to take that same loss against MD income???? The Maryland return starts with Federal AGI and does not seem to have a place to add back the out of state loss....does this mean I do not have to???? Seems like a double-dip to me.
Thanks for any input!! karen PS. I prepare taxes in NY...so MD is a new territory for me. | |
| May 28, 2008 | |
| In every state, you allocate income/loss by state. For NY, if you have to file, you'd allocate the loss all by itself...and for MD, everything except the loss. This is one where you'd hope the loss was suspended to future years since I bet big money that NY won't let you carry it forward. | |
| 28 May 2008 | |
| You lost me. In NY, I am filing a NON-RESIDENT return, which allows me to allocate income, etc to NY sources or not, which explains deviation from Federal return figures. In MD, I am filing a RESIDENT return. There is no place to allocate out of state stuff. So how would I explain the devation from the Federal return???
PS> Using ProSeries. | |
TheTinCook (talk|edits) said: | 28 May 2008 |
| You would not subtract income or add back losses for the MD resident return. MD taxes its residents on all income no matter what the source. There should be no deviation from Federal AGI except for the adjusments under MD law.
NY taxes non-residents on NY source income in relation to all income. | |
| 28 May 2008 | |
| Tin...thanks for the response. I think I got it. Below is my total scenario...let me know if my thinking is right.
- So, in NY, I have unused losses from 2006 and 2007 that total $38K. - In MD, the above losses have been wrapped up in the Federal AGI so therefore already taken in MD. - In 2008, my client sold the NY rental property. Federal gain will be $160K. - In NY, he should pay NY income tax on $160K - $38K = $122. - In MD, he will pay tax on federal amt of $160K. Will he also be allowed a credit in MD for taxes pd in NY??? Thanks!! | |
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