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Returning Member
posted Jan 11, 2020 8:22:16 PM

I am a non-resident of California and have a rental property there. Where do I take credit for non-resident income tax on rental income?

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6 Replies
Level 13
Jan 12, 2020 1:50:11 PM

What is your state of residence?

Returning Member
Jan 12, 2020 2:14:34 PM

I am a Nevada resident. I want to know what fed form and where I can put California state income tax. I can't add this tax to schedule E line 16 (Taxes) because it will be counted as additional tax payment and will reduce CA tax which is wrong.

Level 15
Jan 13, 2020 9:53:27 AM

State and local income taxes are entered on Line 5a of Schedule A on your federal return.

https://www.irs.gov/pub/irs-pdf/f1040sa.pdf

Level 13
Jan 13, 2020 10:11:49 AM

The Calif tax is a cost of doing business.

If you were in a state that had an income tax, you would have been able to receive a credit for taxes paid to other states to avoid being taxed on the income twice.

However, since Nevada does not have a state income tax, you aren't being taxed on that income twice and as a result, no credit, no deduction on Sch E.

As noted, you might be able to deduct on Sch A if you itemize.

Returning Member
Jan 13, 2020 9:01:52 PM

I take standard deduction. This state tax is on rental income. So it is a cost of doing business in California. I don't understand why I won't be able to deduct it somewhere other than schedule A.

Level 15
Jan 14, 2020 7:06:46 AM