Question about State Taxes: Other Expenses - Rental Use Only section

Forum|Forum|1 year ago
March 17, 2025
2 replies
2 views

For this section, Turbo Tax automatically transferred the "Other Expenses" for the rental property from the federal return. It also says that I can "enter additional expenses that can be deducted only on your state return."

What kind of expense are allowed here? If I've already entered the expense on the federal return (e.g. property tax, repairs, etc) do I enter them here as well?

Thanks!

AmyC

Level 15

No, don't enter the same expenses. Each state is unique. If you have already entered everything, go ahead and file. If you want to reply with your state, we can look for more information.

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Jay156Author

Level 2

The state is California. What would be examples of expenses that can be entered for the State?

Thanks!

Monikak11

Level 2

The main differences between California and Federal returns for rental property are in the calculation of depreciation, and the definition of material participation in rental real estate activities. TurboTax will handle the depreciation calculation. The expenses you described are deductible on the California return the same as on the Federal return, so you would not list them here.

The instructions for California Schedule CA, which lists the differences between California and Federal line items on your return, states the following for Line 5 – Rental Real Estate, Royalties, Partnerships, S Corporations, Trusts, etc.:

Adjustments to federal income or loss you reported in column A generally are necessary because of the difference between California and federal law relating to depreciation methods, special credits, and accelerated write-offs. As a result, the recovery period or basis used to figure California depreciation may be different from the recovery period or amount used for federal. For more information, see the instructions for Part I, Column B and Column C, Section B, line 3.

California law does not conform to federal law for material participation in rental real estate activities. Beginning in 1994, and for federal purposes only, rental real estate activities conducted by persons in real property business are not automatically treated as passive activities.

Answer the questions in the TurboTax interviews, and these items should be treated correctly.

@Jay156