Hi Coleen,
Thanks. Yes, it is zero income due to expenses/depreciation.
Three questions based off your reply:
1) If we prorate the rental by time spent in each state, do we apply the prorating to ALL line items on the Schedule E? e.g. do we also prorate the depreciation?
2) How in TurboTax can we split a rental property, since the state returns just ask if X property should be excluded from that return? Do we need to create two Schedule Es at the federal level, one for the MA portion of the year and one for the NC portion? How will splitting the property impact the federal return - I anticipate all the income will still get cancelled by the prorated expenses and depreciation, but are there any other impacts?
3) You said "The gross income may not be sufficient to have to file state returns since it is not for the entire year." - what level of gross rental income would mean that we don't need to file state returns in NC and MA? The gross rental income before expenses etc. was only ~$12600 for the whole year - prorated it would be less than $7000 in each state.
Thanks for any help you can offer!
