I am retired, live in NJ and own a foreign rental property. Can I claim my rental losses on NJ-BUS-2? Or is that allowed only for corporations, not for individuals?

[Carl]

The fact the rental property is in a foreign country doesn't matter. You still report all rental income and expenses on SCH E, and on your state return too.

Pay attention when entering the property for the very first time on the federal return. By default it is identified as being physically located in the U.S. You must change that selection yourself to indicate the property is foreign rental property. Only then can you enter the foreign address of the property. That will also cause the property to be depreciated over 30 years as is required for foreign residential rental property, instead of the standard 27.5 years for U.S. based rental property.

If that foreign rental property was place in service prior to 2018, then it will be depreciated over 39 or 40 years.  The program will know, based on your selections as you work it through.

[erdinch]

Carl,

Many thanks for your immediate reply; appreciate. There is no issue in reporting the rental income and expenses on Sch. E for FED return and on Sch. NJ-BUS-1 for NJ state return.

My question is, as an individual, whether I can claim rental losses in NJ state return on Sch. NJ-BUS-2 or not. I remember from a discussion with a tax professional some years ago that only corporations can claim such losses but I could not find my notes from then. I also could not find any reference documents, during my search of today, explaining the subject, including from NJ Division of Taxation website. I appreciate if you could please elaborate on that as well.

Many thanks.