The requirement for VT is the gross income and not the net income. If the gross income for the rental is greater than $1,000 you must file even though there is a net loss and no tax.
You include all income on the MA return as a resident. If the loss was not allowed it would be limited automatically on your MA return but you should not remove it manually. They allow what the federal law allows:
- MA Income Tax Treatment of Passive Losses: The Massachusetts treatment of passive activity losses for Massachusetts residents is the same as the federal treatment. Allowable losses are the same losses that are allowed on federal Form 8582, line 19, to the extent that the losses were not deducted.
@tomandjerry1
[Edited: 04/12/2025 | 10:07 AM PST]
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