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posted Jun 4, 2019 1:32:11 PM

Do I report K-1 income from LP in state I live in or state the LP is located?

I am a resident of Delaware who also works in Delaware. I am a limited Partner in a Family Limited Partnership based in Pennsylvania that owns property and produces rental income. I receive a K-1 from the FLP.  Do I need to report that income on a Non-Resident PA return or is it taxable to Delaware as the state I reside in?

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1 Replies
Intuit Alumni
Jun 4, 2019 1:32:13 PM

Both: PA gets to tax the K-1 because the income source (rental) is there, and DE gets to tax it because you live there (your resident state gets to tax all of your income regardless of source).

Prepare the nonresident TT/PA return first, then your TT/DE resident return so that TT/DE can prepare for you the other state tax credit for some or all of the PA tax on the rental income that DE is also taxing - this helps to prevent double taxation.