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Elanskier
Returning Member

Rental loss in Florida

My losses on my rental condo in Florida are 3x my gain (not rented most of year while repairs done). When I enter my losses, my SC state tax goes way up. Do I need to include the Florida income/loss in SC return as there is no state income tax in FL and I receive no state deductions for the loss?

3 Replies
Carl
Level 15

Rental loss in Florida

You're not clear on what you are calling a loss. Unpaid or uncollected rent is not a loss by any stretch. You can not deduct that which you never received and paid taxes on in the first place.

When it comes to residential rental property, it is *EXTREMELY* rare to ever show a taxable profit. It's more common for rental property to show a loss *ON PAPER* every single year at tax time. Those losses continue to increase with each passing year too.

So exactly what are you calling a loss?

If you were not renting because you were doing repairs on the property, I seriously doubt the work would be classified as a repair. Sounds more like a property improvement to me.

 

Carl
Level 15

Rental loss in Florida

Oh yeah, since FL does not tax personal income and SC does, that means there is no reciprical tax agreement between FL and SC. Since SC taxes all of your income from all sources that means your income/losses from the FL rental are also reported on your SC state return. It doesn't matter that the property is out of state. It only matters that you are a SC resident and SC taxes all of your income from all sources regardless of where that income comes from.

yes, there are excpetions for those states SC has a tax agreement with. But FL isn't one of those states.

 

Elanskier
Returning Member

Rental loss in Florida

Thanks for the reply. The repairs were from an upstairs sewage pipe leak, repairs covered fractionally by insurance, and tenant left. This limited my income but increased my expenses tremendously.

It doesn't make sense that including the small income from rent lowers my SC tax on TT, but then recording the larger associated expenses increases my tax liability significantly. The opposite should have happened-the rent should have increased my tax, and those expenses should then decrease my taxable income.

Very confused...

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