@bazbsg If you had a carryover loss for Schedule E last year, it could be used against Rental Income this year.
Check your Schedule E to see if any of your carryover loss was used this year. If so, that reduces the amount of rental income you have to report to Arizona (by reducing your rental income in your Federal return).
So in essence you are applying your Carryover Loss to your Arizona Rental Income, you are just doing it in your Federal return.
Click this link for more info on How to Enter Passive Loss Carryovers.
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