When my rental income has a net loss, what do I enter for the Net Rental amount in the State return? negative number, 0 or the gross rental income?

[meixiaoxiao]

Hi,

I live in Florida but has a short term vacation rental in Hawaii.

I have a gross income of rental about 12,022, but net -20,000 loss on the rental due to expanse and depreciation.

After I finished Federal and when I filed non-resident tax for Hawaii, on the Rents page for Hawaii state return, it says:

Enter the portion of your net income from rents, royalties, and flow-through entities that was derived in Hawaii. If non, enter zero:

Net Income from Rents, Royalties:  The Federal amount is $0, Hawaii Amount: ???

What should I enter for Hawaii amount: -20,000, 0, or 12,022?  So far I enter $12,022 but I think I may be wrong here and would like to seek clarification.

Thanks a lot in advance!

Mei

[ColeenD3]

Yes. Please see this answer from Carl.

A Hawaii nonresident is an individual who is in Hawaii for a temporary or transient purpose, and whose permanent domicile is not Hawaii."

That has nothing to do with this. You are required to file a HI non-resident tax return to report your rental income/expenses incurred while conducting business in Hawaii. On all gross rents received you have to pay 4.5% General Excise Tax (GET). This is on the gross rent received, not on the rent after expenses. If you rent your property on a shorter term basis and shorter term basis in this case is defined as 180 days or less per tenant, then you’re obligated to pay an additional 10.25% Transient Accommodation Tax (TAT). The only possible way to "settle up" with the state for the tax year, is to file the state tax return.

There are other requirements too. An out of state landlord is required to have a local property manager, a local contact, there always needs to be somebody here in the state available that can assist the tenant in case of an emergency.

There's also state tax reporting documents you have to issue to your tenants too, so they can claim their tax credit or "renter's credit" on their state tax return.

Bottom line is, if you don't file a state tax return, all it takes is one tenant reporting they haven't received their tax documents from you, and the state will audit you. The fines are hefty too.

When you go to renew your State tax ID, if you are not current with the HI Dept of Taxation, that too will trigger an audit along with hefty fines.

[Carl]

The link provided doesn't really answer your question. What you enter is the amount of your total income that was generated by any business you have an ownership interest in, that is registered in HI and/or has a physical presence in HI. So for the rental property you own in HI, you'll enter the gross amount of all rents received. This will include any late fees as well as any other income received from any source for any reason, for that rental property.

[meixiaoxiao]

Thank you Carl!