@sidekickin Again I am not a CPA, but this is my understanding:
1. 2021 was the first year of your investment in Oklahoma. So yes, there are no years before 2021 to carry the loss back to. BUT if you plan to earn money from this investment in 2022, then you need to file a tax return to the State of OK to tell them you had a loss in 2021. That way, you will have the record of the loss in 2021 so that you can use your loss to carry it forward to 2022 and reduce your 2022 income. Ex: In 2021, you had a net loss of -$1000. In 2022, let's say you earned $5000. If you told OK in 2021 that you had the net loss of -$1000 in 2021, then you can carry it _forward_ and subtract that from your income in 2022. So then $5000 - $1000 = $4000. Then you are only taxed on $4000 in 2022. If you don't file the -$1000 loss with OK in 2021, you can't tell them on your 2022 taxes, "Btw, I had a $1000 loss in 2021. I want to subtract that from my $5000 income in 2022." It would be too late then.
2. You may not be actively involved in your investment in OK. BUT if you are engaging in activity to make money, the State of OK (and the federal govt) consider that to be a "business" that you have. So for my example, I own a rent house in OK. For me, this is also a passive investment b/c I have a property manager who is actively involved in managing the property. And I do not spend enough time as defined by the IRS actively managing my investment. (The rule is something like if I spent more than 50% of my work time, including my job, managing my property in OK and elsewhere, and I meet some other IRS-defined tests, then I could be considered "actively involved" in a property management business. Use Google to learn more if you want.)
So back to my example. I just have a rental property as an investment. I do not spend enough hours or enough work to for the IRS to consider me to be "actively involved", so it a passive investment for me. BUT I still will make money from this passive investment in 2022. I hope to have a profit. And since I filed in 2021 my operating loss (let's say it was -$1000), then when I file taxes in 2022, I can subtract this -$1000 from my income in 2022. Let's say it is $10,000 income/profit in 2022 (just to illustrate). Then when I file my taxes in 2022, I can take $10,000 - $1000 (loss from 2021) = $9000. So then I am only taxed on $9000 instead of $10,000. So even though I only have an investment and it is passive, in 2021, the -$1000 is still called an "operating loss" b/c this is a business, even though the IRS does not consider me to be actively involved in it. I hope that makes sense. And check with your own CPA on this. Good luck.
