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I am a non-resident of California and have a rental property there. Where do I take credit for non-resident income tax on rental income?
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Investors & landlords
What is your state of residence?
Also keep in mind the date of replies, as tax law changes.
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I am a Nevada resident. I want to know what fed form and where I can put California state income tax. I can't add this tax to schedule E line 16 (Taxes) because it will be counted as additional tax payment and will reduce CA tax which is wrong.
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Investors & landlords
State and local income taxes are entered on Line 5a of Schedule A on your federal return.
https://www.irs.gov/pub/irs-pdf/f1040sa.pdf
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Investors & landlords
The Calif tax is a cost of doing business.
If you were in a state that had an income tax, you would have been able to receive a credit for taxes paid to other states to avoid being taxed on the income twice.
However, since Nevada does not have a state income tax, you aren't being taxed on that income twice and as a result, no credit, no deduction on Sch E.
As noted, you might be able to deduct on Sch A if you itemize.
Also keep in mind the date of replies, as tax law changes.
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I take standard deduction. This state tax is on rental income. So it is a cost of doing business in California. I don't understand why I won't be able to deduct it somewhere other than schedule A.
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See "Taxes" in this CPA reference: https://www.therealestatecpa.com/blog/ultimate-guide-irs-schedule-e