In a Part-Year Resident State Return, how do I allocate the loss on a rental property that exists in another state?

[investng engineer]

Hi Dave,

That's exactly what I said. The loss for the whole year need to be reported on the Arizona return. Part of the loss also need to be reported on the California return.

[NW2206]

Thanks so much!

I will report all losses on my AZ return since the property is located in AZ and all losses were form an AZ source. 

If all losses occurred while I was a CA resident, would I also report all losses on my California return? Or would I only report 1/12 of my losses since I only lived in California for one month? (I believe this is what you mean about an allocation ratio.)

[investng engineer]

Say you became a California resident on Dec 1. Then you need to report all losses during December on California return. This may not be 1/12 of all your losses in the tax year -- for the days during which the property was still your primary residence, you can't report any loss. Say you started renting out the property on Nov 1, then you would report 1/2 of all losses on California return, assuming that the rents of the two months are the same.

If you only started renting out the AZ property when you have become a California resident, then you can report all losses on your California return.

[NW2206]

Thank you so much! I appreciate your guidance.