topic New York K-1 Real Estate Loss in State tax filing

New York K-1 Real Estate Loss

hfluss — Sun, 12 Jul 2020 13:46:04 GMT

I am a non-resident of NY with NY source income/loss only from a real estate partnership. My NY K-1 has a NY loss of $3,369 on line 2 (Col. C), net rental real estate income. I have NY net additions and subtractions of $2,669. I am not an active real estate professional.

Am I correct that

1) My reportable NY loss is $700 ($3,369 - $2,669)?

2) I do not need to file in NY?

Also, is that $700 loss carried over in some way to 2020 to offset NY income from the partnership, or is it lost? If so, how do I carry it over?

Thanks!

Re: New York K-1 Real Estate Loss

DavidS127 — Sun, 12 Jul 2020 22:44:09 GMT

Yes, based on those numbers, you will report a $700 loss for NY. Because a rental activity is a passive activity, it is likely not allowed unless you have passive income to which it can be applied. It can be carried forward to apply against future passive income, or be deducted when the property is sold.

Although it could be argued that with a loss you do not need to file a NY tax return for this year, I recommend doing so for purposes of accurately tracking your NY calculation of passive activity loss (PAL) carryforward amount (which can be different that you federal carryforward amount reported on Form 8582).

See NY Form IT-182 at this link for more information on how NY calculated PAL limitations and carryforward.

Re: New York K-1 Real Estate Loss

hfluss — Mon, 13 Jul 2020 12:55:06 GMT

Thank you, sir.

I think I'll save the extra TT state cost, and remember next year to use the carryover (and keep track of carryovers going forward).

Re: New York K-1 Real Estate Loss

AdamAsks — Fri, 19 Aug 2022 01:10:03 GMT

David, I have a friend who tells me that as a resident of NY, non-real estate professional (I have a W2 job), if I claim passive loss from real estate as a LLC limited partner (property located outside NYS), that the (accelerated?) depreciation is ignored and my NY State return should change me state tax if there is no longer a loss. I tried to model this in TT 2021 but my numbers didn't change (passive loss didn't help Federal or State). Can you explain or provide links that would?

Thank you!