Solved: Do I file a nonresident state return if my rental prop (only available in Dec) had no income? Do I deduct a portion of the mtg interest under rental expense?
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dor99
New Member

Do I file a nonresident state return if my rental prop (only available in Dec) had no income? Do I deduct a portion of the mtg interest under rental expense?

 
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DS30
New Member

Do I file a nonresident state return if my rental prop (only available in Dec) had no income? Do I deduct a portion of the mtg interest under rental expense?

No, you will not need to file an SC nonresident state income tax return if your SC located rental property has no net income.

According to the SC Department of Revenue, a nonresident individual only needs to file a SC nonresident state income tax return if the gross income taxable to South Carolina is more than the federal personal exemption amount. So if you have no SC source income, then no SC nonresident filing is required.

Regarding your rental expenses -

If you rental property was AVAILABLE for rent during 2016, you will be able to claim rental expense on Schedule E from the time the property was available for rent until the end of the 2016 calendar year (regardless if the property was ACTUALLY rented).

If the rental property was not available for rent for the entire 2016 tax year, then no rental expenses will be deductible on Schedule E.

Allocation of mortgage interest, mortgage insurance and property taxes -

Since this is the first year for your rental property, you will need to allocate these expenses between days while before available for rent and days when the rental property was available for rent (whether or not actually rented on day the house was available for rent)

When entering your mortgage information, you can divide the amounts of mortgage interest, mortgage insurance and property taxes between the number of days (or months) the home was not available for rent and the number of days (or months) the house was a rental property.

For example, if your mortgage interest is $12,000 and your house was only available for rent for 5 months, then $5,000 will be allocated to your rental (Schedule E) and $7,000 will be allocated to your home mortgage interest deduction (Schedule A) as a second home. Report each portion separately under the corresponding section in TurboTax.

Please note that if your rental house was available for rent for 9 months but only rented for 5 months, you will allocate your mortgage related expenses based on rental availability regardless of how long it was actually rented. Using the example information, you would allocate $9,000 (the months available for rent) to your rental property instead of $5,000 (months actually rented). TurboTax will automatically allocate any portion of the mortgage interest not available for use under the rental section (Schedule E) to your personal deductions section (Schedule A) in this situation.

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3 Replies
DS30
New Member

Do I file a nonresident state return if my rental prop (only available in Dec) had no income? Do I deduct a portion of the mtg interest under rental expense?

What state is your rental property located in?
dor99
New Member

Do I file a nonresident state return if my rental prop (only available in Dec) had no income? Do I deduct a portion of the mtg interest under rental expense?

South Carolina
DS30
New Member

Do I file a nonresident state return if my rental prop (only available in Dec) had no income? Do I deduct a portion of the mtg interest under rental expense?

No, you will not need to file an SC nonresident state income tax return if your SC located rental property has no net income.

According to the SC Department of Revenue, a nonresident individual only needs to file a SC nonresident state income tax return if the gross income taxable to South Carolina is more than the federal personal exemption amount. So if you have no SC source income, then no SC nonresident filing is required.

Regarding your rental expenses -

If you rental property was AVAILABLE for rent during 2016, you will be able to claim rental expense on Schedule E from the time the property was available for rent until the end of the 2016 calendar year (regardless if the property was ACTUALLY rented).

If the rental property was not available for rent for the entire 2016 tax year, then no rental expenses will be deductible on Schedule E.

Allocation of mortgage interest, mortgage insurance and property taxes -

Since this is the first year for your rental property, you will need to allocate these expenses between days while before available for rent and days when the rental property was available for rent (whether or not actually rented on day the house was available for rent)

When entering your mortgage information, you can divide the amounts of mortgage interest, mortgage insurance and property taxes between the number of days (or months) the home was not available for rent and the number of days (or months) the house was a rental property.

For example, if your mortgage interest is $12,000 and your house was only available for rent for 5 months, then $5,000 will be allocated to your rental (Schedule E) and $7,000 will be allocated to your home mortgage interest deduction (Schedule A) as a second home. Report each portion separately under the corresponding section in TurboTax.

Please note that if your rental house was available for rent for 9 months but only rented for 5 months, you will allocate your mortgage related expenses based on rental availability regardless of how long it was actually rented. Using the example information, you would allocate $9,000 (the months available for rent) to your rental property instead of $5,000 (months actually rented). TurboTax will automatically allocate any portion of the mortgage interest not available for use under the rental section (Schedule E) to your personal deductions section (Schedule A) in this situation.

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