California resident with out of state rental loss

[Pico Rico]

How is this reported on the California resident income tax return?

Just treat it as any other rental property? There is no refund from the
other state due to the
loss .

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[Mark Bole]

On 2012-10-19 08:25, Pico Rico wrote:
> How is this reported on the California resident income tax return?
>
> Just treat it as any other rental property? There is no refund from the
> other state due to the
> loss .
>

As a CA resident, all world-wide income is taxed, and CA taxable income
starts with federal AGI. There would be no state income adjustment for
a resident due to an out of state rental, so the answer to your question
is, there is no special reporting of this activity on your CA return.

Now, reading between the lines of your question, one might ask a
follow-up -- If there had been a profit, then one would most likely be
in a "other state tax credit" situation, where CA gives residents a
credit for the lower of the other state tax or its own tax on the
double-taxed profit. So, shouldn't the same thing apply to tax savings
due to a loss? IOW, don't allow a loss to be double-counted (by two
states) for state tax purposes.

In fact I did ask this question once, in this forum I think, and the
answer was, there is no special handling in this situation, each state
recognizes the whole loss for its own tax purposes, and does not adjust
for the fact that the loss was double-counted by another state.

If there was no other income from the other state, then of course the
tax benefit of the rental loss would be zero to the other state, and
there wouldn't be any adjustment for CA anyway.


--

Mark Bole, EA
Enrolled Agents - America's Tax Experts
http://markboletax.com

[Alan]

On 10/19/12 11:25 AM, Mark Bole wrote:
> On 2012-10-19 08:25, Pico Rico wrote:
>> How is this reported on the California resident income tax return?
>>
>> Just treat it as any other rental property? There is no refund from the
>> other state due to the
>> loss .
>>
>
> As a CA resident, all world-wide income is taxed, and CA taxable income
> starts with federal AGI. There would be no state income adjustment for
> a resident due to an out of state rental, so the answer to your question
> is, there is no special reporting of this activity on your CA return.

CA has its own Schedule E where adjustments MAY need to be made to the
federal Schedule E because CA did/does not conform to federal law on
depreciation.


--
Alan
http://taxtopics.net

[Mark Bole]

On 2012-10-19 12:25, Alan wrote:
> On 10/19/12 11:25 AM, Mark Bole wrote:
>> On 2012-10-19 08:25, Pico Rico wrote:
>>> How is this reported on the California resident income tax return?
>>>
>>> Just treat it as any other rental property? There is no refund from the
>>> other state due to the
>>> loss .
>>>
>>
>> As a CA resident, all world-wide income is taxed, and CA taxable income
>> starts with federal AGI. There would be no state income adjustment for
>> a resident due to an out of state rental, so the answer to your question
>> is, there is no special reporting of this activity on your CA return.
>
> CA has its own Schedule E where adjustments MAY need to be made to the
> federal Schedule E because CA did/does not conform to federal law on
> depreciation.
>
>

Thank you for that catch. With no Sec. 179 for most rental property,
state depreciation adjustments wouldn't be routine but there's always
federal bonus depreciation for new appliances and such to consider.

Perhaps I should have instead answered the OP's other question, "Just
treat it as any other rental property [for a CA resident]?", to which
the answer would be "yes". ;-)

--

Mark Bole, EA
Enrolled Agents - America's Tax Experts
http://markboletax.com