Carryover of Passive Losses on form 8582 in Hawaii Non-Resident Tax Form N-15

Forum|Forum|2 months ago
April 19, 2026
1 reply
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We live in California, and have rental properties outside as well as inside Hawaii. When we file form N-15 (Hawaii Non-Resident tax return), we properly mark all non-Hawaii properties as being outside Hawaii with 0 income so that they don’t participate in any income calculations.

In 2025, we had $36800 loss from our Hawaii properties and $22500 gains from our non-Hawaii properties. We thought that none of the $22500 non-Hawaii gains would count for Hawaii non-resident taxes, and all the $36800 losses from Hawaii properties would carry over to 2026. But we see that the federal form 8582 is attached to the N-15, where $22500 non-Hawaii gains are listed as allowed in 2025 and they offset the $36800 Hawaii losses.

Why doesn’t Turbo Tax remove the non-Hawaii properties from 8582 and doesn’t carry forward all our 2025 Hawaii losses? We use 2025 Turbo Tax Home and Business.

Thank you!

TurboTax Business Windows

PatriciaV

Level 15

Have you completed the Hawaii state interview? There are many questions that allow you to zero out income from sources outside Hawaii.

Also, be sure you have checked the box under Enter Your Hawaii Business ID# to indicate that your non-resident businesses did not operate in Hawaii. Then enter zero for Hawaii Gross Receipts.

If you answer these questions correctly, you should see a loss on Line 16 of your Hawaii N-15.

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ulalenaAuthor

Level 2

Hi Patricia,

Thank you for your reply! We completed the interview, checked the boxes for properties that do not operate in Hawaii and entered zeros for the gross receipts for those properties. We have a correct loss on Line 16 of our Hawaii N-15 ($36800).

My question was about the carryover amount to the next year, which I thought was to be calculated on form 8582. I would think that if in 2025 we lost $36800 from our Hawaii properties, then next year we would be allowed to write off up to $36800 of the 2026 income. But Hawaii doesn't have it's own 8582, and Turbo Tax includes the federal 8582, which offsets the $36800 Hawaii losses with $22500 non-Hawaii income. Does it mean that we are losing the full carryover of $36800 and will only have $36800 minus $22500 = $14300 as a carryover loss for 2026?

PatriciaV

Level 15

Your passive carryover loss should be reported on the Activity Worksheet for the rental property under the Hawaii forms. Line 7 reports Passive disallowed loss (carryover to next year).

Since your federal return uses the Hawaii rental losses to offset other income, you won't have a carryover loss on your federal return next year. But the disallowed passive loss can be used on your Hawaii return in the future when you have passive income.

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