Thanks, Patti! I agree that the loss does not reduce my income. However, as I need to file taxes in Maryland and Pennsylvania... who do I pay the tax to? If I use TurboTax's methodology, it indicates I need to pay $55.00 to Pennsylvania (and $55 less to Maryland). However, if I "correctly" (manually) fill out the PA-40 Schedule E according to the form directions, then I do not owe $55.00 in PA taxes (instead of paying the $55 to Maryland) - consistent with the Pennsylvania Department of Revenue online filing with PA MyPath which indicates I do not owe any state tax to Pennsylvania due to the loss.
My question at hand... which state do I owe $55 tax to related to the rental property loss?
Thanks again for your insight!
