I bought shares in a limited partnership last year, and have received the K-1's to do the state tax returns. All states are reporting a loss. After reading a few posts here, I understand that I don't have a requirement to file Non-Resident Tax Return in the states that have losses (unless the state specifically says to). However, after contacting one of the states, their department of revenue stated that, if I wanted to claim passive activity losses later, that I have to file a tax return for every previous year in which I had losses that I am claiming.
Question #1: Do I truly have to file a state tax return every year I have losses (Non-Resident)? Why wouldn't I just file a tax return in the year I have income (vice loss), and include all of the previous years' K-1's showing my passive activity losses?
Another issue: For one of my state's K-1, in particular, it says I had a Distribution ($1). However, my K-1 for my state of residence shows Distributions in the amount of $580, which equals the Distributions listed on my Federal K-1.
Question #2: How can my state of residence K-1 show Distributions equal to what is listed on my Federal K-1, with other states also showing Distributions greater than zero?
Question #3: Am I required to report the Distributions on my Non-Resident state tax returns? If so, how/where would that get reported (the K-1 instructions state to not report this in taxable income)?
