Here's a scenario (please bear with me). Will appreciate anything here as I was not able to find, well, anything.
1. In 2019 an individual reported a capital loss of 50000 while a resident of Massachusetts. That year she took 3000 offset on Fed tax return but not on Mass State tax return because Mass does not allow it.
2. Same thing was repeated the following two years (let's assume there were no other capital losses or gains for simplicity.) So 2021 Fed carryover to 2022 was 41000 and 2021 Mass State carryover to 2022 was still 50000.
3. At the end of 2021 this individual moves to a no-carryover state, let's say NJ. Can not carry over on state tax for the following three years (in the meantime Fed carryover is further reduced due to offsets to 32000.)
4. So here's the punchline: at the end of 2024 this individual moves back to Massachusetts and becomes Mass tax resident once again. Let's say for the sake of the argument that in 2025 she makes capital gains.
Question:
A. What happens to the original 50000 Massachusetts capital loss carryover to 2022? Is it lost forever? Or should it be just entered into proper Mass tax form like these three years never happened?
B. To play it safe shouldn't have this individual kept filing 2022, 2023, and 2024 Massachusetts non-resident tax returns (even though Mass income was zero) just for the sake of continuity of this Mass State capital loss carryover?
C. Just to make sure: there should be the same treatment in this respect for both long and short term carryovers, correct?
Thank you
