Passive loss carryforward for non-resident state level (GA) return

Hello TurboTax Community,

Appreciate any help/guidance you can provide on this topic.

Thanks!

If you have nothing to report in Georgia except your Rental Loss, I personally wouldn't file a return.

I'd keep a spreadsheet record of Rental Losses until that time as I had Georgia income to report, or the Georgia Rental property was sold.

@jkm88 

Got this from one of the members of the facebook tax group.  She emailed GA DOR.

Q: How does GA DOR want nonresidents to show the suspended PAL? Which form is equivalent to federal 8582?

A: Georgia has no specific passive activity loss rules. Therefore, whatever is recognized federally would be recognized for Georgia purposed based upon Georgia’s starting with the federal AGI. There is no Georgia equivalent form to the federal form 8582. You may create a separate individually-designed schedule to show the accumulation of passive activity losses and attach it to the Georgia return. The Department of Revenue anticipates revising future tax forms (tax years 2023 and forward) and schedules within such forms to specify how passive activity losses may be shown to property calculate Georgia taxable income. Such revisions are anticipated to be announced later this year.

I am following up on this question. I saw:

"You may create a separate individually-designed schedule to show the accumulation of passive activity losses and attach it to the Georgia return."

How do I do that?

Same with SC, they either do not have 8582 or just copy the information from the Fedral 8582 form in SC 8582, which is incorrect. Is this a TT bug? How do I report SC specific passive loss for 2023 and carry forward from 2021 and 2022 in the SC 8582 form? Can I overwrite the current Fedreral 8582 nformation in SC 8582 form?

Thanks,

Thank,

Did anyone ever figure this out? I have similar questions about tracking passive losses for states.

It doesn't appear as though there are any changes to the Georgia (GA) return in relationship to the passive activity losses (PALs). Georgia has no specific passive activity loss rules. Therefore, whatever is recognized federally would be recognized for Georgia purposed based upon Georgia’s starting with the federal AGI. There is no Georgia equivalent form to the federal form 8582. You may create a separate individually-designed schedule to show the accumulation of passive activity losses and attach it to the Georgia return. The Department of Revenue anticipates revising future tax forms and schedules within such forms to specify how passive activity losses may be shown to property calculate Georgia taxable income. 

• GA Rules on IRS Federal Tax Changes

@plawlor78

Thanks @DianeW777. I'm interested for Oregon, Montana, and Missouri K-1s. I'm a California resident.

I still don't really understand how this is tracked at a state level then. If I have multiple K-1s that have income/losses from multiple states, then it seems that the federal numbers and state numbers would be quite different. For example, if I have a property in Montana, the income/losses should not affect my Oregon return, right? But it does affect the federal return.

Yes, you are correct. Only holdings for nonresident states would need to be continually tracked so that you have the required information for each particular state. It's part of the process in  your situation.

The filing requirement is important for each state as well. Some nonresident states require a return if you file federal and any income is from their state, some require only if you meet the filing requirement, still others require net income versus gross income. 

• Do I need to file a state return?

For any state that is not required to be filed, then you would need to manually track the carryforwards if they also conform to the federal tax laws.

@plawlor78 

Thanks for clairifying this some more.

@DianeW777 Can you help me with Oregon specifically? If I had just losses this year, do I need to file so that I can carryforward the losses? Or can I not file and just keep track of the losses myself?

No.  You cannot just keep track of the losses yourself.  You must file so the state/federal have record of your losses.  

Thanks @Vanessa A.

For previous years when I did not file when I only had losses, can I just file a return now for those previous years? That way, I can carryforward all the losses? 

Yes.  You can go back and amend your return for the past years to claim the losses.  However, you would need to amend each year after to claim the loss.  So if you amended your 2020 return and had a loss, you would need to amend your 2021, 2022 to continue to carry it forward.  It has to be used up in consecutive years.  Since the filing deadline for a refund is closed for 2021, it wouldn't have any affect there but you would still have to use it up. 

In other words, if you had a $30,000 loss in 2020 that you carried forward, then you had no gains in 2021 you would use the $3,000 on the 2021 amended return but you would NOT RECEIVE the refund.  However, you would be able to claim a refund for 2022 and 2023 at this point because the 3 year window for refunds has not passed for those years. 

Thanks @Vanessa A. That helps.

My situation is that I have had losses in these nonresident states for years and never filed since I thought that I could keep track of the losses on my own until I had a gain. Given that, it sounds like I should file (not amend since I never filed) for these past years in the non resident states. Correct? 

In your example, why would you use $3000 on the 2021 return if you had no gains? Why wouldn't you just add the current year passive losses to the carryover losses? In my situation, I have losses in 2020, 2021, 2022, and 2023 where I never filed and now have a gain in 2024 since they sold the property. I'm not looking for a refund in past years but rather to carryforward the losses and use them this year (and future years).

Correct.  If you never filed, you would not amend, just file.

Because you need to carry it over each year.  You cannot skip a year.  So it has to be applied consecutively. 

Thanks @Vanessa A. I'll file for each year going back to 2020 then. Can I file all of those at basically the same time: 2020 then 2021 then 2022 then 2023? 

I'm still unsure about your example, why would you use $3000 on the 2021 return if you had no gains? Why wouldn't you just file each year, adding the current year passive losses to the carryover losses? 

If I get TurboTax Live, would they be able to help with entering all of this into the state returns?

Yes.  You can file them all basically at the same time.

The $3,000 was an example for federal. However, you filed your federal returns, just not Oregon non resident return if I understand correctly at this point?  

The IRS has you use $3,000 per year against  your ordinary income. Oregon does not.  So your losses are only used against your gains for Oregon.  Therefore, every year that you have gains, you could apply the loss carry forward to.  Any year you do not have gains, you will need to file JUST to carryover the loss. 

TurboTax live generally only files the current year returns.  

OAR 150-316-0006 Application of Capital Losses and Capital Loss Carryforwards

@Vanessa A, correct, I have been filing my federal and California tax returns each year, but I was not filing in non-resident states where I only had passive real estate losses from K-1 partnerships.

I think that I understand conceptually what should happen, so now I need to figure out how to enter it through TurboTax for Oregon. For example, should I be entering values here, especially for the carryforward losses

Yes.  And yes, they are suspended until you close out of the investment.

@plawlor78