I paid for a Live Expert and got my answer. The issue was that the Iowa state form asked for income received from the rental property. There is no further information requested in the state form as far as expenses, depreciation, etc. on the property. The loss from Schedule E 1040 does not transfer to the Iowa state form. In order to get the correct result (no tax on a loss) the solution was to copy/paste the Schedule E loss amount and put it in as a negative number in the rental income received box for the Iowa state form. The result in TurboTax state form then shows $0 tax due for Iowa. This post can be closed as resolved.
